Renovation Market Index

Are you a renovator interested in being part of the RMI panel of respondents?

2025 Q3/Q4 RMI

Properties of the RMI

(i.e. how to read the number)

The RMI is on a scale of 0 to 100
It's 0 only when everyone says conditions are "poor"
It's 100 only when everyone says conditions are "good"
It's 50 when the % saying "good" = the % saying "poor"
50 is therefore a neutral score; the higher above 50 the RMI, the more positive the outlook is from renovators; the further below 50, the worse the outlook

2025 Q3/Q4 Renovation Market Index (RMI)

This research and economics product provides an indicator of the current and future health of Canada’s residential renovation industry. The RMI is a sentiment indicator, assessing current renovation activity, expectations for renovation activity over the next six months, and the level of client inquiries and project pipelines. It is designed to provide early insight into renovation spending trends and the outlook for and therefore health of the home improvement sector in Canada.

The data for the CHBA RMI comes from a panel of CHBA renovation-focused member businesses, who are surveyed about current business conditions and future expectations. In addition to the standard RMI questions, each quarter CHBA asks “special questions” to gather data and insights into current issues affecting renovators and the broader home improvement industry across the country.

The RMI builds on the success and credibility of CHBA’s Housing Market Index (HMI), expanding CHBA’s ability to capture renovation-specific trends. Inspired by the NAHB/Westlake Royal Remodeling Market Index, the CHBA survey about renovation conditions does differ in that it is based on project types rather than project costs to better allow comparisons of activity across regions (though cost data is still collected). Given the importance of residential renovation activity to housing quality, housing supply, employment, and overall economic performance, the RMI is designed to inform policymakers, economists, financial analysts, industry stakeholders, and the media about evolving conditions in Canada’s renovation market.

If you have any questions or feedback about the CHBA Residential Renovation Market Index, please contact rmi@chba.ca.

Summary for 2025 Q3/Q4 Renovation Market Index (RMI)

Renovators expect challenging market conditions in early 2026

The Canadian Home Builders’ Association (CHBA) is pleased to release the inaugural issue of the CHBA Renovation Market Index (RMI), covering the sentiment of renovators across Canada. The RMI is intended to build off the success of the CHBA Housing Market Index (HMI), providing a leading health indicator of the current and future residential renovation market and improving the lack of data coverage of this economically important industry.

The CHBA Renovation Market Index (RMI) for the second half of 2025 reported an initial reading of 48.3 out of 100. This represents a neutral score, with neutral overall current conditions weighed down by markedly pessimistic future conditions.

The RMI is an important leading indicator, and in important ways provides a more accurate view of the health of the sector versus other macro-economic data. Firstly, while dollar investment in renovation has appeared to increase slightly, when measured in real dollars (i.e. correcting for the impacts of general inflation), renovation investment actually tumbled in 2024 and 2025 to levels not seen since 2013. Further, while, residential renovation investment is expected to grow by around 2% in 2025 in nominal dollars, there is an important distinction between dollar investment and number of renovation jobs, since price escalation, which has gone far beyond overall inflation has driven up the cost of projects substantially. Given the price escalation in products and materials of 39% over the past 4 years (according to the Building Construction Price Index), the amount of renovation activity has actually been going down even more than the real dollar investments show.

As for the CHBA RMI in more detail, the survey asks renovators to rate the current market demand conditions of six broad project categories as “Good,” “Average,” or “Poor.” These six categories are: large interior renovation from 3 rooms to a whole home, small interior renovations up to 2 rooms, additions, exterior envelopes and/or landscaping, secondary suites or ADUs, and retrofits/improvements/repairs. They are also asked to similarly rate the pace and quality of incoming inquiries and leads as well as the current length of their backlog, which represents renovators’ expectations for the near future. Each question is measured on a score bound between 0 and 100, where a score further above 50 indicates that a higher proportion of renovators view conditions as good than poor.

Given the strong and active renovator membership within CHBA, regional RMI results are also available for the RMI. In British Columbia, the score was 41.7, in Prairie Provinces it was 61.3, in Ontario it was 46.1, and in Atlantic provinces it was 64.6. The scores are broadly higher than the regional Housing Market Index (HMI) scores for new housing construction, reflecting better health in the renovation sector than that for new housing construction (especially for ownership), but the variation does track similarly, demonstrating that the market health in renovations relates to housing affordability conditions. Stronger scores in the Prairies and Atlantic Canada, versus poorer scores in Ontario and B.C., are reflected in both the HMI and RMI. In the latest Monetary Policy Report, the Bank of Canada projected that investment in renovations will be uneven across cities and low where affordability challenges persist. The RMI shows this to be true.

The Current Conditions Index averaged 52.7. The component that measured large interior renovations was 65.7 and the component for small interior renovations was 60.2. The component for exterior additions was 45.1 and the component for exterior envelope improvements was 46.1. The component for secondary suites and ADUs was 31.7. The component for retrofits and repairs was 55.0. By comparison, the NAHB RMI averaged 69.5 in the second half of 2025, showing a much healthier renovation market south of the border. Overall, the components that related to interior renovations and improvements were more optimistic relative to the exterior improvement conditions, however this could be related to seasonal early winter conditions.

Looking ahead, the Future Conditions Index only averaged 35.2. The component measuring the pace and queries and quotes was 43.3 and the component measuring the backlog of renovations projects was 27.2, a very low score. Comparatively, the NAHB RMI averaged 54 over this same period. In both countries, renovators were less optimistic about the future, though the U.S. is neutral, versus the negative outlook for Canada. The lower future conditions index is similar to what was recorded in the Housing Market Index for the second half of 2025. Historically, builders tended to be equally or more optimistic about the future than about current conditions, but have become far more pessimistic about the near future in the final two quarters of 2025. Renovators feel the same.

2025 Q3/Q4: Special Questions Key Findings

Each RMI survey also includes topical questions to better understand the issues renovators are facing:

In terms of general feedback, renovators reiterated their materially reduced leads, even with non-aesthetic focused projects, like accessibility and repairs, have declined. In general, clients and potential clients were characterized as more hesitant to move ahead and more price -sensitive than usual.
There is significant variation in the health of renovation companies, with 27% reporting having to lay off workers. Nearly two thirds had not laid off workers, hired more workers, or struggled to find quality hires.

- Regionally, British Columbia was the most varied. 40% of renovators reported having to lay off workers, while 19% said they had hired more workers. These proportions were higher than elsewhere in the country, but this could be related to the higher incidence of custom home builders in this province’s sample, and the variations between the very expensive GVA versus other regions. In Ontario, 27% had reported laying off workers, while 38% say they have not laid off workers. In both the Prairies and Atlantic provinces, 38% found it difficult to find suitable hires, reflecting the tighter labour markets where housing activity is better.

Renovators were asked about their level of concern for their business in 2026. 38% of renovators said they were somewhat concerned. This corresponds to Canadians continuing to be uncertain about the economic future, which threatens big ticket spending decisions like renovations, retrofits, and repairs.

- The highest regional proportion of renovators that were extremely concerned about their business was Ontario. 23% of Ontario renovators were extremely concerned and another 23% were

A central CHBA recommendation to the Federal government is to expand the GST rebate for first-time home buyers to all buyers of homes under $1 million and on a declining basis up to $1.5 million, and to extend it to renovations that make new housing units. Renovators were asked how helpful an expansion of the GST rebate would be if it was made available for renovations that create a new private dwelling (e.g. a secondary suite or a backyard accessory dwelling unit), supporting the increase of Canada’s housing supply. Nearly 75% of renovators said that this expansion would provide immediate help to their business.

Monthly investment data continues to show an increase in apartment renovations, mirroring the rise in multi-family rental starts, and is the strongest growth segment of the renovation industry. Renovators were asked if an increase in apartment renovations is something they’re experiencing. About one third of those renovators that engage in apartment renovations are seeing demand increase, while about half see it staying the same, while the rest (about one sixth) see it declining.

Both government and industry are acutely aware of the aging Canadian population, many of whom want to live in their current homes for the rest of their lives. Although home modifications will be necessary to ensure that Canadians can age in place safely and comfortably, the majority of renovators indicated that this work is increasing at a slow pace or remaining steady.

Renovators were also asked about customer demand for home energy retrofits. Similar to aging in place, the level of customer demand is holding steady according to 47% of renovators. Renovators were also asked about demand for either full or partial home energy retrofits. Here, over 40% said demand was holding steady.

With feedback from CHBA, Statistics Canada launched a residential renovation price index. Builders were asked if the annual cost increase of a kitchen renovation was accurate for the area(s) they operate in. 55% of renovators said the growth rate was too low. CHBA has provided this feedback to Statistics Canada and will continue to engage to help improve that important price index.

Business adoption of AI is moving very quickly. 78% of renovators said they use AI in their business to help with marketing materials and strategies. 20% use it to help with client communications.