Researching the Renovation Market
According to a recently released report, 24% of Canadians intend to spend their spare cash on home improvements and decorating in 2010. (Nielsen Company – Stats Link Canada ID# 39269535 )
If you are surprised to hear that anyone has spare cash these days you can likely relate to the 23% who from the same survey admitted they did not have any spare cash at all!
While the percentage of potential renovators is encouraging, 2010 will still be a tight market. The renovation sector last year was powered through the recession by the Home Renovation Tax Credit. One fifth of the renovation market in 2009 admitted that the tax credit was a major influence on their decision to purchase. (Angus Reid – Stats Link Reference ID# 39268916 – For more references on the HRTC see our subject heading Home Renovation Tax Credit.)
Since this tax program is now complete it is important that renovators identify the other 80% of the market who are eager to purchase regardless of tax incentives.
The best free report available on the renovation market is the CMHC Renovation and Home Purchase Study. It is an annual survey that is conducted in March and released in early June of each year. It includes detailed tables which cover variables such as the value of renovation purchases, most popular renovation projects, renovation intentions, reason for renovation, how the renovation was completed (contracted out, DIY) etc. Details are also provided by major metropolitan area.
Some of the tables also include data by household type such as income group, period of construction and age of owner. This additional data allows you to identify the characteristics of households most likely to renovate. This information can then be compared to the household characteristics of your local market. For more information on accessing local Census data see our Accessing Local Data from the Canadian Census Research Guide.
Another publication to consult is the 3rd Quarter issue of Housing Market Outlook – Canada. It includes a forecast of overall renovation spending for Canada and the provinces. While the detail is not as great as the renovation Ssrvey mentioned above, the market outlook is valuable for both the numbers forecasted and the market conditions identified. You can access the 2009 Q3 issue here.
If you are a general contractor, you can also look at the Census profile for the occupation group “A372 Residential Home Builders and Renovators”. The definition of the renovator part of this heading is: “Residential home renovators own, operate and manage companies engaged in the renovation of existing residential homes.” Profiles for individual trades are also available. For more information on this Census resource see my Blog article My Favourite Census Table
From an industry point of view, general contractors fall under the North American Industry Classification System heading 236110 – Residential Building Construction. For a definition see the NAICS manual entry for 236110.
While this information is helpful, if you specialize in a specific trade you will want to determine which of the detailed trade headings is more appropriate. Again consult the NAICS manual at the Stats Can web site for these other headings.
Once you have established your NAICS code you can then use the SME Benchmarking Tool to get typical performance ratios for small businesses in your industry and province.
For advice on researching competitors look at our Researching Your Competition Research Guide.
We have a number of other references in our Source Lists related to the Renovation Sector. You can view a free trial version of the available data under the subject heading “Renovation Sector” (Stats Link Source List Subscribers click here.)
I hope this article is helpful in starting your research.