Juggling Dynamite

From January to May this year, there was an average of 20 real estate, rental or leasing insolvencies in Canada every month where companies either sought bankruptcy protection or filed creditor proposals.

At this pace, Canada is on track to reach about 240 corporate real estate insolvencies in 2024, which would be 57% more than in 2023 and 13% more than in 2009, when a wide swath of businesses ran into problems owing to the financial crisis and global recession.  See Real estate insolvencies in Canada set to surpass levels of global financial crisis:

And that does not include the number of developers and projects that have been forced into receivership for not paying bills. The Office of the Superintendent of Bankruptcy does not include receiverships with its publicly available bankruptcy statistics. However, insolvency experts say they are seeing more projects go into receivership.

So far this year, the real estate sector accounts for 55 per cent of the receiverships recorded by Insolvency Insider Canada, a website that tracks the largest insolvencies in the country. That compares to 30 per cent last year and 33 per cent in 2022.

Danielle was a guest with Jim Goddard on Talk Digital Network, discussing recent developments in the world economy and markets. You can listen to an audio clip of the segment here.

Luxury properties are not immune from the realty slump unfolding.

A 37th-floor luxury condo in the heart of Toronto’s entertainment district that sold for a $320,000 loss is an example of a condo market that hasn’t been this tough in decades, Realtors and observers say.

The three-bedroom unit, on King Street near the site of the Toronto International Film Festival and across from Roy Thompson Hall, faced an uphill battle to be sold this week at $1.23 million – and that was after several previous attempts failed, said the listing realtor, Rebecca Romeo.

We’re in a buyer’s market all right,” Romeo said in an interview, pointing out that many other agents in the same building faced the same headwinds, as Realtors felt pressure to up their game to make any sale at all.

Her client, she said, was happy with the deal even though it was about 21 per cent less than the $1.55 million he paid for it in 2021. Here is a direct video link.