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The “HGTV Effect” Means Booming Business for Home Renos

August 7th, 2015  |  Home

Canadians are making the old new again with home renovation spending skyrocketing to $68 billion in 2014, outstripping new home sales by $20 billion. A new survey done by the Altus group reported that Canadians are opting out of “buying up” in exchange for building up their current properties.

Some at Altus are pointing to the so-called “HGTV effect” to explain the increased interest in home reno spending but Peter Norman, chief economist for the company, says it’s simply because Canadian homes are getting older.

Norman also said that low interest rates mean more money for homeowners who’ve recently renewed their mortgages. The extra cash is then put back into the home. The Altus report projected continued growth at three percent for the home renovation industry over 2015 and 2016.

Increased home renovation spending has raised concerns in certain corners of the market, however. Those in the insurance industry are worried that home renovation projects are being carried out without proper home insurance coverage.

“I think some homeowners believe keeping their insurance company in the dark about renovation is going to keep their premiums from rising,” said Craig Richardson, vice-president at TD Insurance. “If renovation work is done that materially alters the insured property, the original insurance may be voided. The homeowner is actually paying for coverage they no longer have.”

He emphasized that while certain renovations may raise insurance rates, the alternative means potentially not having coverage available when it is needed most.

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