Real Estate Business Bankruptcy up 142.9% Year-over-Year
New data from the Government of Canada’s Office of the Superintendent of Bankruptcy for March 2024 reveals that bankruptcies in the Canadian “Real Estate Rental and Leasing” sector have rocketed upwards.
In fact, there were 23 corporate bankruptcies in this sector in March 2024 alone, and increase of 142.9% from March 2023’s print of 7.
In 12 months prior to March 2024, there were 145 bankruptcies in this sector, this is up from 103 the prior year and represents an increase of 40.8%.
Real Estate Transactions Down
Its no surprise that real-estate based companies in Canada are experiencing cash flow and solvency issues — sales in the Canadians real-estate sector have slowed dramatically.
According to data from CREA, residential real-estate sales have been roughly cut in half compared to the pandemic highs of 2020.
In the world of real-estate, transactions are where the profit happens. No sales? No cashflow.
With transactions hovering at multi-year lows, there are simply fewer dollars available to balance corporate balance sheets, and the result for some is bankruptcy.
Ontario and BC Corporations Getting Hit Hard
Also notable is that Ontario Corporations in all sectors seem to be getting hit particularly hard, with bankruptcies up 91% vs 2023.
All totaled, 1,061 Ontario corporations closed their doors between March 2023 and March 2024.
In the year prior, between March 2022 and March 2023, only 555 corporations went bankrupt in Ontario; this represents an increase of 91.2%.
British Columbia actually fared worse in percentage terms than Ontario when it comes to corporate bankruptcies — with corporate bankruptcies up 117% in 2024.
However, in nominal terms, the numbers are not quite as shocking as they are in Ontario, with only 115 corporations going bankrupt in 2024 and 53 going under in 2023.
