Consider home renovations with $ caution

British Columbians are the most bathroom-improving, paint-applying, fence-repairing, hot-tub-loving home renovators in Canada.

But an RBC Royal Bank survey found that just 65 per cent of B.C. homeowners plan home improvements within the next two years -- a 10-percentage-point drop from last year and five points below the national average.

The survey said B.C. had the highest percentage of homeowners planning bathroom improvements (43 per cent), paint jobs (53 per cent), fence repairs (15 per cent) and hot tub installations (six per cent).

B.C. residents also plan to spend more money on renovation projects than anywhere else in Canada -- $11,683 compared with a national average of $8,982.

RBC Royal Bank mortgage specialists manager Kevin Lutz said higher interest rates probably explain at least part of the reason home renovation plans have dipped across B.C.

"People are also a little bit discouraged because it can be difficult to get trades now for this sort of thing," he said in an interview. "A certain percentage of people also renovate to sell [their homes] and with real estate sales flattening a bit, they may not be as motivated to renovate now."

Other survey findings about B.C. homeowners and renovations include:

n 61 per cent would rather renovate than sell if their current home needs major renovations.

n 66 per cent plan to pay for all or most of their renovations with cash or savings.

n 42 per cent get their inspiration from big box stores while 39 per cent are inspired by magazines

n 59 per cent have completed renovations in the past two years.

RBC Royal Bank home equity financing vice-president Catherine Adams said that despite slightly lower home renovation intentions in all regions of Canada, renovation activity remain very strong.

"Canadians continue to consider any investment in their homes to be a very good investment indeed," she said.

While 40 per cent of Canadians say they will hire a contractor to do the renovation, which continues an upward trend over the past two years, nearly half still plan to do it themselves.

It's not that homeowners are more cash-strapped than two years ago, but they are more aware of other inexpensive ways to finance renovations, Adams said in an interview. Cost is not usually the top concern of those planning a renovation, she said.

The most popular options to finance a renovation are to draw on a line of credit, cited by 38 per cent, or to use a credit card, mentioned by one-quarter. Only 13 per cent would consider a home equity line of credit, it said, despite being the lowest cost of all the borrowing options.

Establishing a realistic budget for the renovation remains a concern, Adams said, noting that of the two-thirds who budgeted for a renovation over the past two years, 40 per cent went over budget -- on average by a whopping 88 per cent.

The survey of 2,376 homeowners was conducted in late summer by Ipsos Reid for RBC.

(prepared by Bruce Constantineau/Vancouver Sun)