By Sarah Caron, Director, Renovation Services, CHBA
The Canadian residential renovation, maintenance and repair sector is a massive $105-billion industry, outpacing new home construction in size and investment. The sector is a major source of employment, responsible for more than 525,000 jobs across Canada. These jobs generate nearly $37 billion in wages, an important source of consumer spending within local communities. Although elevated borrowing costs and inflationary pressures led to a slight decline in the value of renovations since 2022, the sector remains strong with more than $400 billion invested in the last five years.
However, the renovation sector is plagued by many of the same challenges contributing to a weak sentiment among home builders:
• Labour shortages: Skilled labour remains in short supply, driving up wages and increasing project costs. Finding and retaining skilled tradespeople will be a major challenge.
• Material costs and inflation: While interest rates may decline, material costs remain elevated, making budgeting and cost estimation critical for successful projects.
• Regulatory and permit delays: While governments are pushing for densification, permitting delays still present a bottleneck in many regions.
Key trends
1. Aging housing stock
Canada’s aging housing stock presents a significant opportunity for renovators: 75 per cent of the housing stock is more than 20 years old and nearly five million homes require major or minor repairs, excluding cosmetic updates. This aging infrastructure creates ongoing demand for structural and aesthetic updates, from roofing and HVAC replacements to full home renovations.
2. Energy efficiency retrofits
The transition to more energy-efficient housing is gaining momentum: 73 per cent of homeowners are interested in smart, sustainable, and energy-efficient technologies.1 However, the uptake for energy efficiency retrofits remains low despite available federal and provincial incentives.
3. Densification
Housing affordability remains a major issue, leading to increased interest in secondary suites, accessory dwelling units and laneway suites, and nearly 25 per cent of households considering multi-generational living.2 Government at all levels has responded by offering tax credits, low-interest loans and municipal zoning changes to encourage high-density housing solutions.
4. Economic conditions
Economists predict interest rate cuts throughout 2025, which could boost housing market activity and, in turn, renovation demand. Up to 40 per cent of mortgages renewing in 2025 may benefit from lower rates, freeing up household budgets for renovations. Lower interest rates will drive increased home sales, which often trigger renovation projects as buyers update newly purchased homes.
5. Homeowner priorities
Consumer sentiment around homeownership and renovation is shifting. With rising home prices, many homeowners prefer to renovate rather than relocate. Aging-in-place renovations are particularly in demand, as 75 per cent of Canadians 60-plus want to live at home for the rest of their lives.3
Looking ahead
According to BuildForce Canada, the renovation sector is projected to grow two per cent above inflation to 2033 and continue to employ more workers than new home construction, solidifying its place as a cornerstone of Canada’s housing industry. A massive $1-trillion inter-generational wealth transfer will fuel home upgrades, while high real estate transfer costs will encourage renovating over relocating. Multigenerational living, secondary suites and income-generating renovations will become more common, especially in high-cost markets such as Toronto and Vancouver.
While challenges such as labor shortages and inflation persist, opportunities abound for renovators who can adapt to market demands:
• Expanding the skilled workforce: Renovators who invest in training, apprenticeships and workforce retention strategies will be better positioned for long-term success.
• Leveraging government incentives: Helping clients navigate grant and rebate programs can set renovators apart from competitors.
• Preparing for increased demand: Renovators who build capacity through training, education and technology can increase efficiency and customer satisfaction.
The renovation market in 2025 is set to expand, driven by aging housing stock, government incentives and shifting homeowner priorities. For renovators, success will depend on strategic planning, embracing technological advancements and positioning their business to meet the evolving needs of Canadian homeowners.
Looking for more information on this topic? Check out the CHBA webinar, Renovation Outlook for 2025 and Beyond, available exclusively to CHBA members at
chba.ca/webinars.
Key takeaways:
The $105-billion renovation market is larger than new home construction.
Aging homes and green retrofits will be major drivers of renovation demand.
Densification and multi-generational living are shaping future home designs.
Interest rate cuts could boost home sales and renovation activity.
Renovators who specialize in sustainability and accessibility will be well-positioned for long-term growth.
