Home renovations made simple
Starting a major home renovation in 2021 is daunting for homeowners. Lumber prices are at an all-time high in Canada, drastically increasing the costs of new construction. The cost of furniture is quadrupling in some locations due to recent tariffs. And finding a contractor seems almost impossible when every construction professional in a hundred-kilometre radius is fully booked for the next six months.
At times like these, contractors need to stay informed of the latest renovation trends. Being able to explain the reasons behind shortages of renovation materials will help you retain client trust despite unforeseen delays in deliveries, skyrocketing lumber prices, and your own busy schedule. Transparency and integrity have always been a cornerstone of your contracting business—show your clients that this hasn’t changed despite the additional challenges of home renovations in 2021.
Why the increased demand for home renovations?
Even with COVID-19 restrictions, almost three-quarters of Canadians are planning home renovations during 2021. Two major factors are at play in this recent renovation trend:
The pandemic has shifted priorities
Your clients are renovating their homes in 2021 to adapt to a whole new world. Shelter-in-place orders and remote work have changed the way Canadians spend their time at home. A house now functions as office, school, and cafeteria. Homeowners are looking for renovations to update offices, kitchens, and with summer coming up, outdoor living areas. As younger family members move back home, the need for privacy and additional living space becomes acute.
Renovations are more attractive in the current housing market
According to a survey by RE/MAX, over fifty percent of Canadians renovated their homes with the intention of continuing to live in them during 2020. The housing bubble shows no sign of bursting anytime soon. Homeowners are opting to renovate what they have rather than dive into a seller’s market. While return on investment is still an important consideration for home renovations in Canada, improving quality of life is the primary goal in today’s renovation market. Your clients will be planning renovations that they intend to enjoy for years to come.
Why has the cost of lumber gone up so much?
The current price of lumber in Canada is increasing construction costs by tens of thousands of dollars. How can you explain the sudden spike in the price of lumber to your clients?
When the pandemic hit in March 2020, many mills were forced to close during initial lockdowns. Demand for their lumber continued to rise, however, and when the mills came back into operation they faced a backlog of orders.
Disruptions in the transport of lumber and continued full or partial mill closures limited the supply of lumber well into 2021. Meanwhile, residential and commercial construction companies are still placing orders. You may want to discuss alternatives to lumber with your clients when helping them plan their upcoming home renovation.
What your clients want to know before starting their renovation:
It’s important to have answers handy for your clients’ questions about completing a home renovation during 2021. Unfortunately, finding the time to research renovation trends is well-nigh impossible when you have contracts booked solid for the next six months. Use our cheat sheet below for clear, concise answers to questions about the renovation market.
What’s with these prices?
Demand is high for lumber, appliances, and renovation materials of all kinds. With decreased output by manufacturers due to lockdowns and factory closures, and disruptions of the supply chain, materials are scarce. The increased demand relative to the limited supply has driven up material costs.
Why is it so hard to find a contractor?
The home remodelling industry is booming, and more people are looking to hire a contractor than ever. However, the number of contractors has stayed the same—and those professionals are still playing catch-up on contracts delayed by lockdowns and a lack of renovation materials.
Why are renovation materials so hard to find?
Closures at the beginning of the pandemic reduced the efficiency of mills and factories over the past year. Materials shortages are ongoing, but the active home renovation market drove an increase in demand. Suppliers are still playing catch-up to compensate for delays earlier in the pandemic.
How long will it take for my appliances, windows, and doors to arrive?
Disruptions in the supply chain are still delaying shipments. Manufacturers of appliances, windows, and doors are also in the same situation as lumber mills and contractors—lockdowns limited their production capacity at the start of the pandemic while demand for their product has only grown through 2020 and 2021.
As of May 2021, a shortage of computer chips is also impacting the supply of appliances. Ovens, refrigerators, and stoves that use smart technology are expensive and hard to find in stock. Delivery times may be delayed for weeks or months.
What you can do to prepare for these challenges
Successful home renovations in 2021 are all about dealing with the unexpected and being prepared. Staying informed of the current events driving renovation trends is a great first step, so you can help your frustrated clients understand what’s going on. You should also follow these three simple rules to minimize the negative impact of COVID-19 on your projects:
With clients growing ever more impatient about their delayed home renovation plans, it can be tempting to book the first available subcontractors. However, it is as important as ever to properly vet your pros. Be transparent with your clients and explain this process to them so they understand why you can’t hire just anyone. Share with them our article on how to choose a contractor for your home renovation.
Tell clients to expect the unexpected with home renovations during COVID-19. Homeowners can use the Smart Reno project planning tool to develop their ideas for a home renovation, providing you with the information to prepare your project quote.
Develop a budget and agree on terms of payment
Your clients may be at a loss when it comes to developing a realistic renovation budget in 2021. You can use the Smart Reno cost estimator tool to help them determine how much money to set aside for their new construction. Ensure you have a signed contract that covers what happens if the cost of materials goes up or if there are additional timeline delays due to the pandemic. To account for potential delays, tie your payments to project milestones rather than a date-based payment schedule.
Meeting new challenges in home renovations during COVID-19
Collaborating with homeowners to modify renovation plans as problems arise has always been a part of contracting work, but it has never been more important than during the pandemic. Your standard contract may go through significant revisions as you adjust the payment plan, materials suppliers, and standard fees to reflect the current renovation trends.
Being able to explain each of these changes to homeowners, both in terms of what they will mean for the project and why they are necessary, is essential for building trust in a volatile renovation market. To your clients, you are the authority on construction matters. Help them navigate the home remodelling industry by providing clear answers to their questions.
Register with Smart Reno today to match with homeowners looking for project quotes.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.