Scotia Bank’s economic analysis division, Scotia Capital, is predicting a slowdown in Canada’s renovation sector due to a predicted reduction home sales in 2011.
According to Scotia Capital, “The renovation boom (2007-2010) reflects in part the continuing high level of home sales. With home sales having peaked in 2007, the largest share of these ‘new buyer’ renovations should be winding down.”
More specifically, Social Capital indicates that the economic and financial landscape is becoming less conducive to continued expansion in renovation spending. This includes moderating home sales and prices, a leveling off in homeownership rates, high household debt loads, (eventually) rising interest rates, and more stringent mortgage refinancing rules in effect since April 2010 (lowering the home equity withdrawal limit from 95% to 90%).
To learn more visit Scotia Capital’s website.