Residential Renovation Price Index, second quarter 2024

Released: 2024-10-25

Introduction to the Residential Renovation Price Index

This is the first release of the Residential Renovation Price Index (RRPI), a program that provides a comprehensive portrait of the changes in the cost to complete residential renovation projects in Canada. There has been growing interest in understanding price changes in this sector in recent years, as increasing renovation activity has led residential renovations to account for a growing share of gross fixed capital formation in residential structures. The RRPI will complement existing price indexes for residential construction.

The RRPI program provides indexes for 37 individual renovation projects, which are organized into 8 renovation project groups and calculated across 15 census metropolitan areas (CMAs). Data for 11 CMAs begin in the first quarter of 2017, while the data collection was expanded to capture 4 additional CMAs beginning in the first quarter of 2023.

Cost pressure persists on the West Coast in the second quarter

In the second quarter of 2024, residential renovation prices increased 0.7% in Canada, following a 0.8% increase in the first quarter. British Columbia experienced the largest quarterly price increases in the second quarter at 1.4%, followed by Saskatchewan at 1.3%, and Newfoundland and Labrador at 1.2%. Quebec experienced the smallest quarterly increase at 0.4%.

Across the CMAs measured, Victoria and Vancouver experienced the strongest quarterly growth, both rising 1.4% in the second quarter. Saskatoon trailed closely, with renovation prices rising 1.3% in the second quarter, followed by Calgary at 1.2%. Ottawa (+0.3%) and Montréal (+0.2%) experienced the smallest quarterly increases.

While the cost to complete each individual renovation varies significantly by project and location, renovations in the heating and air conditioning equipment project group experienced the strongest quarterly increases in the second quarter, followed by those classified as exterior additions or improvements.

Annual price increases linked to local construction activity and wage pressure

The national composite RRPI increased 3.7% year over year in the second quarter. Large variances in price movements were reported across the country, with British Columbia experiencing the strongest year-over-year growth at 5.8%, followed by Saskatchewan at 5.7%. Composite prices in Quebec experienced the smallest annual increase, rising 1.3% year over year.

Labour shortages and the resulting wage pressure played a large role in renovation pricing pressure over the last 12 months. As construction activity has remained strong in British Columbia and across the Prairies, labour shortages have persisted in several skilled trades. These shortages have resulted in both British Columbia and the Prairie region reporting some of the country's largest wage increases over the last 12 months, as measured by the Construction Union Wage Rate Index.

Across the country, the roofing, exterior additions or improvement, and windows and doors renovation project groups experienced the strongest growths in prices year over year.

Price growth normalizes after COVID-19 pandemic period peak, but pressure remains uneven across the country

From the RRPI's first available data in the first quarter of 2017 to the second quarter of 2024, the national composite index has increased 66.5%. Ontario experienced the largest increase, with the provincial composite index increasing 91.8%, driven by strong price pressure in Toronto. British Columbia saw the second-largest increase at 56.9%, and Newfoundland and Labrador trailed closely in third at 56.4%. Saskatchewan (+40.5%) and New Brunswick (+40.1%) experienced the lowest price pressure.

The quarterly growth in renovation prices remained relatively modest from the first quarter of 2017 through the second quarter of 2020, ranging from 0.1% to 1.7%, but during the pandemic lockdown period, the costs to complete residential renovation projects began to rise sharply. As lockdowns impacted supply chains, and distancing mandates made in-person work more challenging, project lead times and their associated costs soared, while demand persisted unabated. The quarterly growth in the price to complete residential renovation projects rose from 0.3% in the second quarter of 2020, to a peak of 5.9% in the first quarter of 2021. From the second quarter of 2020 to the second quarter of 2021, the national composite RRPI rose 14.7%. While quarterly renovation price growth slowed somewhat, it remained elevated until the second quarter of 2022, with prices rising 18.9% from the second quarter of 2021 to the second quarter of 2022. As interest rates rose and the rate of renovation projects slowed, the quarterly growth in residential renovation prices began to return to pre-pandemic levels, although price pressure continues to remain uneven across the country, owing to both local demographic and labour availability trends.

Contact information

For more information, or to enquire about the concepts, methods or data quality of this release, contact us (toll-free 1-800-263-1136; 514-283-8300; infostats@statcan.gc.ca) or Media Relations (statcan.mediahotline-ligneinfomedias.statcan@statcan.gc.ca).