FairSquare Group Realty, which was previously called Purplebricks, cited the slowdown in the housing market for its shuttering.Fred Lum/The Globe and Mail
Desjardins Group is shuttering its real estate brokerage FairSquare Group Realty in a surprising reversal for the Quebec financial services firm, which had bought the business in the first year of the pandemic when the country’s real estate market was booming.
FairSquare, which was previously called Purplebricks, cited the slowdown in the housing market for the move, and said on its website that it was “no longer accepting new business.” The website showed that FairSquare was registered to work as a brokerage in Ontario, Manitoba and Alberta.
“The decision to cease the operations of FairSquare was not an easy one,” Desjardins spokesperson Chantal Corbeil said in an e-mail. “We have [made] efforts to promote FairSquare activities, but the rapid deterioration of the housing market and its business model do not allow us to continue operations,” she said.
The country’s real estate market has slowed significantly since the Bank of Canada made a series of interest-rate increases, which raised borrowing costs. The volume of home resales has plunged and January’s activity was the lowest since the Great Recession. Prices have fallen for 11 straight months and the typical home price is now 15-per-cent below peak values in February of last year.
FairSquare’s demise is reminiscent of what happened to Purplebricks and its British-based owner. Purplebricks exited Canada after it failed to gain traction with its ambitious international expansion plan. The online brokerage competes with traditional brokerages on price by offering a flat-fee as opposed to commissions typically paid to real estate agents.
In mid-2020, Desjardins spent $60.5-million for Purplebricks’ Canadian subsidiary, which included operations in Quebec called DuProprio, and Purplebricks in Ontario, Manitoba and Alberta. DuProprio was well established in Quebec, but Purplebricks was still trying to make a name for itself in other provinces.
When Desjardins bought Purplebricks, it was supposed to provide the financial services firm with another avenue to sell products and acquire new clients.
Desjardins said it would keep the DuProprio brand and continue to operate in the Quebec market. “Abandoning our buy-and-sell activities outside Quebec does not compromise our ecosystem in Quebec,” Ms. Corbeil said.
The sudden drop in sales activity has hurt other real estate players. Late last year, Properly Inc. laid off about half its staff, saying conditions had “deteriorated much faster” than it anticipated and that it could not predict when the market would recover. Properly was a relatively new brokerage that provided home sellers with a guaranteed sale if the seller’s property met specific requirements.