Desjardins Group will close DuProprio’s sister company for outside Quebec while the real estate market is experiencing a major slowdown.
The real estate broker FairSquare, which Desjardins had acquired in 2020 at the same time as DuProprio, is no longer accepting new requests from clients, indicates the company on its website. FairSquare, formerly known as Purplebricks, is a real estate brokerage that operates on a fixed fee rather than a commission basis. He is active in Ontario, Manitoba and Alberta.
This “difficult to make” decision is attributable to the slowdown in the real estate market, explains Desjardins spokesperson Chantal Corbeil. “Desjardins has made efforts to promote FairSquare’s activities, but the rapid deterioration of the real estate market outside Quebec, particularly in Ontario, and its economic model do not allow us to continue operations. »
In July 2020, Desjardins Group acquired the broker and the DuProprio brand in Quebec for a total amount of $60.5 million. At the time of the transaction, FairSquare had 200 employees. The financial cooperative will have to record a charge in its results due to this closure, but this would be “insignificant”, according to Ms.me Trash.
The Canadian real estate market was enjoying momentum at the time of the acquisition. The trend reversed with the rise in interest rates. Residential property sales in Canada had their worst January since 2009 this year, according to data from the Canadian Real Estate Association. Prices have fallen for 11 consecutive months, and the average price of a typical home is 15% lower than at the peak in February 2022.
DuProprio continues
The decision will have no impact on the activities of DuProprio or RénoAssistance in Quebec, assures Desjardins. “For now, Desjardins will focus its efforts on the Quebec market. […] Developing business outside Quebec remains a long-term priority, particularly with the RénoAssistance and DuProprio offer. »
Desjardins failed to make up for FairSquare’s lack of awareness in the provinces where the broker was present. The company did not enjoy a reputation comparable to DuProprio in Quebec. Prior to the acquisition, for the 10-month period ended April 30, 2019, the Purplebricks business sold to Desjardins had an adjusted operating loss of $4.8 million. This was primarily due to marketing expenditures to promote the Purplebricks brand in Ontario, Manitoba and Alberta.
Desjardins says it is “making every effort” to limit the repercussions of the cessation of activities on customers and to support the employees affected by this closure.