With new developments in construction technology, interest in home improvement, and new considerations in housing supply needs, the home improvement industry – worth $80.1 billion in 2019 – is expected to grow.
With new developments in construction technology, interest in home improvement, and new considerations in housing supply needs, the home improvement industry – worth $80.1 billion in 2019 – is expected to grow.
Not only has the home renovation market in Canada grown 15% over the last five years, but it also makes up significant market share. The home renovation market represents 58% of total residential construction spending, which is $20 billion more than what is spent on new home building. In a recent survey by HomeStars, almost three quarters (74%) of Canadian homeowners are planning to improve their homes in 2021. In fact, 35% of the respondents were anticipating to spend between $10k-$50k in 2021.
Several factors are fuelling rapid growth in the home renovation sector. Increases in real estate prices and low market inventory have forced many homeowners to opt for renovation over new purchases, with only 9% of Canadians planning to sell their homes in the next 12 months. Aging housing stock has also forced homeowners to renovate out of necessity or has been the result of the ever-growing need for retrofits. Lastly and most importantly, the simple rise in property prices and the high levels of sales generates the need for renovation and has been the biggest contributing factor to the increased valuation of the renovation market.
The Homeowner / Contractor Gap
Despite the industry’s explosive growth, challenges remain. For many homeowners, a proper understanding of cost expectations, budgets, and timelines remain a major issue. The cost to develop a bathroom, for instance, is often misaligned with homeowners’ expectations, resulting in overspending – in fact, only 36% of homeowners say that remodelling projects are completed on budget.
Transparency into renovation projects is also a challenge for many homeowners – 64% of Canadians say that they do not trust their contractor, which is compounded by the failure that most Canadians have in auditing their contractors; only 29% check online reviews. Although most homeowners eventually find the appropriate service providers, nearly 26% of Canadians find it challenging to do so due to availability, inability, or lack of synergy between contractors.
There is a growing need to adequately address all of these issues for those seeking home renovation.
Digitally Innovating to Uncomplicate Renovations
How can digital solutions aid homeowners in seamlessly achieving their home improvement and renovations plans? Given the many renovation challenges homeowners face, technology can be instrumental in managing projects’ time and cost, creating transparency, and connecting and seamlessly completing projects. These solutions may include:
Guidance for homeowners in developing their renovation or home addition projects for strategic home enhancements;
Project management services;
Information and knowledge tools that provide calculations, incentives, or renovation grants; or
Streamlined services for permitting and financing
Many organizations are already innovating around these problems and potential solutions. Canadian companies Handy and Homestars have made it easier to find and book a contractor or service provider to repair, upgrade, or renovate one’s house. Sweeten ‘matches’ contractors and owners based on project requirements, allowing homeowners to fully monitor their project every step of the way. Dividend Finance provides digital and flexible solutions to attain loans or other financial products for renovation via a digital platform that gives access to relevant renovation and retrofitting information.
Innovations have also been simplifying construction for homeowners. Using 3D technology, Modsy guides customers to visualizing their home designs, resulting in better informed owners. Houzz has become a leading platform in facilitating design/planning, construction, and completion for any home improvement project via digital mobile platforms.
The home improvement and renovation industry is taking major steps towards solving longstanding challenges. As the market continues to grow, so too will the innovative technology solutions that streamline renovations for homeowners.
