Generation “DIY”: Young Quebeckers are Hands-On, but are Blowing their Budget in the Process
New survey from Capital One Canada finds Quebeckers would rather renovate than move this year.<?xml:namespace prefix="o" ns="urn:schemas-microsoft-com:office:office"??>
Montreal, June 11, 2013: A new study released today by Capital One Canada shows home renovations can be a risky endeavour for young Quebeckers (18-34 years) who are the most likely to get themselves into money troubles compared to other age groups when faced with a renovation project.
Working with CROP Research in advance of the upcoming July 1 moving day, the study found over a third (37%) of Quebeckers spend more than they planned to when renovating, with young Quebeckers admitting to being the most likely (39%) to go over budget, with almost one-fifth (17%) having no budget at all.
This higher-than-average propensity to overspend is likely linked to the fact that Generation Y renovators tended to have the highest budgets ($7,380 on average, almost twice the amount of renovators aged 35-54). A lack of proper skills could also be the culprit: even though only 5% of young renovators would call themselves “experts,” an overwhelming 68% of those planning projects in the next 12 months will do the work themselves, opting not to hire a specialist.
A misguided tendency to “DIY” without the necessary skills or experience can be a budget-busting combination.
"Although it might be tempting to try to save money by doing everything yourself, it's important to keep in mind that hiring a professional for the more difficult renovation tasks will actually help you save more money in the long run," said Brigitte Poitras, home staging expert.
Although the majority (85%) of Quebeckers consider home renovations to be a positive investment, there are clear indications that they may also be a financial burden for the province’s younger generation of renters and homeowners. Almost one-quarter (24%) of Quebeckers aged 18 to 34 who have renovated their home in the last year admit that the experience caused them to spend beyond their means, compared with 19% of those aged between 35-54 and only 8% of renovators aged 55 and over.
“While it’s a positive sign that young Quebeckers are choosing to invest in their homes, it is disconcerting that they are having so much trouble setting a budget and sticking with it,” said Pascal Bricault, Director, Capital One Canada. “When you compare their behaviour with that of their parents’ generation, it is clear that they face a significant learning curve for how to properly budget for and plan a home renovation project.”
Quebeckers listed credit cards with no annual fee (27%), cash rewards (22%) and fraud protection (22%) as those that are most beneficial for their home renovation projects. When it comes to financing their projects, a quarter of home renovators aged 18 to 34 planned on using their credit cards.
“In order to reap the full benefits of credit card rewards, it is imperative to use a card responsibly,” said Mr. Bricault. “My advice to younger people planning a home renovation project is to only use a credit card to finance their project if they have enough money saved to pay off their balance in full by the due date to avoid interest charges.”
Other key study findings:
· Outaouais is the region in Quebec with the highest number of planned renovation projects in the next 12 months (37%), closely followed by Estrie (36%) and Mauricie (34%).
· Despite its strong economy, Quebec City reports the fewest residents planning renovation projects (24%), and will also spend the least on average($3,754).
· Saguenay residents spend the most on average for home renovation projects ($5,446), closely followed by Estrie ($5,441) and Montreal ($5,231). Quebec City renovators spend the least on average ($3,754).
· Cosmetic renovations like indoor painting (49%) and curtains and blinds (26%) were among the most popular home renovation projects carried out by Quebeckers in the last 12 months. When it comes to more intensive renovations, the most popular projects are flooring (27%), the kitchen (20%), patios and balconies (19%), and the basement (17%).
· While the bathroom was the area of the home most targeted by Quebeckers who renovated in the last 12 months (22%), the kitchen is overwhelmingly the space that the highest amount of respondents (42%) would renovate if they had $10,000 to spend.
· 27% of Quebeckers plan to pursue home renovations in the next year
· Young (18-34-year-old) Quebeckers face the most challenges related to financing their home renovation projects, with one-quarter getting into financial trouble.
· The myth of moving day? Only 4% of Quebeckers plan to move on July 1, and 83% of Montrealers intend to stay in their current residence over at least the next six months.
Data collection:Online data collection took place from May 16 to 24, 2013 via web panel.
A total of 1,423 questionnaires were completed among Quebeckers.
Weighting and representative nature of the sample:The results were weighted so as to reflect the distribution of the adult population in Quebec according to the gender, age, administrative region (Saguenay-Lac-Saint-Jean, Estrie, Outaouais and Mauricie/Centre-du-Québec), mother tongue and level of education of the respondents. In addition, a series of questions drawn from Panorama (3SC), the major CROP Research annual study on consumer values, were added to the questionnaire. This allowed CROP Research to weight the sample according to the personal values of respondents based on a probabilistic sample.
Finally, please note that due to the non-probabilistic nature of the sample, calculation of the margin of error does not apply.
About Capital One
With offices in Toronto and Montreal, Capital One has offered Canadian consumers a range of competitive MasterCard credit cards since 1996, when the company first introduced the Platinum MasterCard in Canada. Capital One Canada is a division of Capital One Bank, a subsidiary of Capital One Financial Corporation of McLean, Virginia (NYSE: COF). Capital One believes in empowering Canadians to take control of their finances through programs and resources like Understanding-Credit.ca, Credit Education Week Canada and the Capital One SIFE Financial Education Challenge