1 Economic Consulting CHBA Pulse Survey: Renovator Highlights Economic Consulting Peter Norman, Senior Director & General Manager Altus Group Economic.

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Economic Consulting

CHBA Pulse Survey:Renovator Highlights

Economic Consulting

Peter Norman, Senior Director & General ManagerAltus Group Economic Consulting

CHBA Renovators’ CouncilMarch 4, 2010

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Economic Consulting

Pulse: what it is and how we do it

Mail survey

Typically 6-8 page questionnaire

Tracking questions, as well as new issues each survey

Sent to all CHBA builder members (new home builders, renovators)

External sponsors – CMHC and Natural Resources Canada

Analyzed by Altus Group Economic Consulting

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Economic Consulting

A valuable source of informationabout the homebuilding industry

Up-to-date monitoring - takes the “pulse” of the homebuilding industry

Gets the views of both new home builders and renovators

Trending – tracks how key aspects of the homebuilding industry are changing over time

Regional results - can look at variation across the country

Benchmarking - lets individual homebuilders gauge their performance against other builders

Fills the gaps – allows exploration of issues not covered by other sources that are important to the homebuilding industry

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Economic Consulting

Recent Pulse Highlights

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Economic Consulting

Renovators in all regions reported higher activity on average in past year…

Source: CHBA Pulse Survey, Winter 2010Source: CHBA Pulse Survey, Winter 2010

% of Renovators% of Renovators

49

38

60

4841

5046

2331

0

22

136

20

0

15

30

45

60

75

BC Alberta Man/Sask Ontario Quebec Atlantic Canada

Higher Lower

Change in renovation activity in last 12 monthsChange in renovation activity in last 12 months

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Economic Consulting

… and in general were relatively optimistic about increased work for the next year

Source: CHBA Pulse Survey, Winter 2010Source: CHBA Pulse Survey, Winter 2010

% of Renovators% of Renovators

4438

60

4135

27

40

7 40

1510 7 10

0

15

30

45

60

75

BC Alberta Man/Sask Ontario Quebec Atlantic Canada

Higher Lower

Expected change in renovation Expected change in renovation activity in next 12 monthsactivity in next 12 months

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Economic Consulting

Almost two-thirds of CHBA builder members involved in renovation work to some degree

44

22

6 6 7

16

36

25

6 7 7

18

0

10

20

30

40

50

Zero 1-24% 25-49% 50-74% 75-99% 100%

2009 2010

% of Builders% of Builders

Source: CHBA Pulse SurveySource: CHBA Pulse Survey

% of Total Revenues Generated by Renovation Work% of Total Revenues Generated by Renovation Work

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Economic Consulting

About 1 in 4 builder members generate at least half of revenues from renovation work

35

10

22

36

29 2924

17 16

4449

3532

0

10

20

30

40

50

60

BC Alberta Man/Sask Ontario Quebec* Atlantic Canada

2009 2010

% of Pulse Respondents Reporting at Least 50% of Revenues% of Pulse Respondents Reporting at Least 50% of RevenuesIn Past Year Generated from Renovation WorkIn Past Year Generated from Renovation Work

Source: CHBA Pulse SurveySource: CHBA Pulse Survey

n.a.

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Economic Consulting

This year’s top critical problems for renovators

23

1

3

3

1

4

4

17

1

5

4

9

6

3

42

10

9

7

6

6

6

0 10 20 30 40 50

Undergroundeconomy

Mold

Increasing BuilderLiability

InsuranceRates/Premiums

ConsumerConfidence

Builder profitability

Insurance Coverage

Winter 2008

Winter 2009

Winter 2010

% of Renovators

Source: CHBA Pulse SurveySource: CHBA Pulse Survey

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Economic Consulting

2 in 3 renovation projects by CHBA/APCHQ members valued at more than $50,000

Source: CHBA Pulse SurveySource: CHBA Pulse Survey

% of Renovators% of Renovators

2217

20 18

914

1813

2027

149

0

10

20

30

40

50

$10,000 orless

$10,001-$25,000

$25,001-$50,000

$50,001-$100,000

$100,001-$200,000

$200,001+

Winter 2009Winter 2010

Average size: Average duration:Average size: Average duration:

$40,000$40,000 6 weeks6 weeks

$50,000$50,000 8 weeks8 weeks

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Altus Group’s Outlook for Renovation Spending

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Economic Consulting

After more than doubling in previous 10 years, real renovation spending stalls

2002=100 (constant dollars)

60

80

100

120

140

160

180

200

Q11993

Q11994

Q11995

Q11996

Q11997

Q11998

Q11999

Q12000

Q12001

Q12002

Q12003

Q12004

Q12005

Q12006

Q12007

Q12008

Q12009

Source: Altus Group based on Statistics Canada dataSource: Altus Group based on Statistics Canada data

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Economic Consulting

Homeowner renovation intentions improve markedly

1211

1011

1011

1412 12

1110

13

0

4

8

12

16

20

Dec-98

Dec-99

Dec-00

Dec-01

Dec-02

Dec-03

Dec-04

Dec-05

Dec-06

Dec-07

Dec-08

Dec-09

% of Homeowners Agreeing Completely Planning Renovations over $5,000

Source: Altus Group, The FIRM Residential Mortgage Survey

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Economic Consulting

% of Home Owners Agreeing Completely That They Plan toUndertake Renovations of At Least $5,000 in Next Year

Renovation intentions by region

Source: The FIRM Residential Mortgage Survey

118

12 11 10

15

1110 11

17

13 12

17

13

0

5

10

15

20

25

30

B.C. Alberta Man./Sask. Ontario Quebec Atlantic Canada

Sept.08 & Dec.08 Sept.09 & Dec.09

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Economic Consulting

Home renovations, an estimated $55 billion industry

30.233.2

37.341.3

45.749.9

54.9 54.0 55.253.0

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009 2010f 2011f

Total Residential Renovation Spending, Canada, $Billions, Current

* Includes conversions and repairs. Source: Altus Group Economic Consulting based on Statistics Canada data

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Economic Consulting

Questions?