The Globe and Mail has reported that spending on renovation has outpaced new construction, as housing prices have reached the stage where more homeowners have decided it makes more sense to upgrade than move up to a new home.

The Bank of Montreal reported that more money was spent renovating Canadian homes than building new ones during the 12 months to the end of June. “Ind the four quarters (through the second quarter) renovation activity outpaced investment in new residential construction $48.4 billion to $40.3 billion, as the latter has rolled over recently,” the newspaper quoted BMO economist Robert Kavkic as saying in a recent report.

The newspaper said these findings echo observations from the Canadian Imperial Bank of Commerce (CIBC), along with the Bank of Nova Scotia.

There are two reasons for this trend. In the first, the price gap between new homes has risen to the point that it is beyond purchaser’s capacity to buy new, but they can still renovate.  The second issue relates to the population’s aging — as people grow older, they want to move less frequently.

“With a larger elderly population staying put in their homes and a rising proportion of homeowners unable to trade up, demand for renovation work could stay strong,” the newspaper reported.