Renovation boom drives price growth in Toronto and Vancouver despite market pressure: Re/Max

Billions of dollars spent on renovations and infill development during the pandemic have boosted the overall value of residential housing and supported higher prices for single-family homes in Toronto and Vancouver, despite broader market pressures, according to the 2024 Re/Max Canada Changing Landscapes Report.

National spending on home renovations up 8% to nearly $300 billion — Toronto and Vancouver lead the way

The report highlights how ongoing revitalization efforts in these cities have significantly impacted housing supply and affordability, especially in urban cores. From 2019 to 2023, national spending on home renovations — including additions, upgrades and equipment — reached nearly $300 billion, an 8.0 per cent increase from the previous five years. Toronto and Vancouver were at the forefront of this trend.

Contrastingly, throughout the same time, residential building permits for single-family homes in the Toronto and Vancouver Census Metropolitan Areas (CMAs) totaled just over $27 billion — a near-24 per cent decline from the previous five years and a trend that’s expected to continue.

However, the value of permits for multi-family housing rose by 60 per cent from 2014-2018.

“With all available tracts of land in the city committed to high-density construction, the single-detached home is quickly becoming a unicorn,” says Re/Max Canada president Christopher Alexander.

“Existing homeowners who can’t find what they want in the market will buy an older home in an area of their choice and renovate or build their vision. We expect this trend will strengthen in the years to come and serve to drive price growth in single-detached housing even further. There are a variety of variables at play, but renovation and revitalization is having significant implications for housing supply and affordability.”

Revitalization & gentrification

Revitalization is still one of the most underestimated elements impacting rising housing values.

Renovation and infill development have transformed neighborhoods, particularly in areas where land values have far outpaced the value of existing homes. Older bungalows and two-storey homes are being replaced by custom-built houses, changing the face of working-class areas into desirable hotspots.

The report also highlights gentrification, particularly in Vancouver, where single-detached homes are growing larger, while condominium units are shrinking. Despite the overall decline in single-family home numbers, new construction has led to bigger houses in the Vancouver CMA, with the average home size reaching 3,600 square feet — the largest among major Canadian cities.

In Toronto, the number of vacant land properties dropped significantly (by 6,680) between 2019 and 2021, reducing opportunities for new single-family developments. As much as 30 per cent of the Greater Toronto Area (GTA)’s housing stock was built before 1960, making renovation a key strategy for updating older homes.

Stable prices: Those who can make their moves now vs later may be better off

Renovation activity, combined with rising affluence and intergenerational wealth transfers, continues to impact the housing market. The average price of a detached home in the GTA has increased by almost 35 per cent between 2019 and 2023, rising from $1.05 million to $1.42 million. In Vancouver, detached home prices have climbed nearly 38 per cent over the same period, from $1.42 million to $1.96 million.

However, Alexander points out that prices are currently stable compared to 2023: “Those in a position to make their moves now may be better positioned than those in 2025, as prices currently remain close to year-ago levels in the Toronto CMA and modestly higher in the Vancouver CMA.”

As Canada’s major cities continue to evolve, Re/Max expects that renovation and infill development will play an even larger role in shaping the housing market in the years to come. 

“The detached housing supply in urban centres is in the midst of a monumental metamorphosis that will unquestionably impact housing inventory and composition for further generations of real estate consumers,” notes Alexander.

Review the full report here.