Overall Liquidations Jan 2021 - July 2023
September sees an 11% drop from August, totaling 161 liquidations compared to the 180 in the previous month. Although keeping with the trend of the prior two years, 2023 still sits at 22% higher than 2022 for the month. As we approach the end of the year, forecasts for the following months become increasingly ambiguous. A dramatic spike in liquidations is seen in November of 2022, approximately 93.27% higher than in 2021.
Total Liquidations - 2008 vs 2023
Although the first half of 2023 partially reflects the long-term effects of an inflated property market in the form of growing liquidations, 2008 may offer some insight into the level of insolvency seen in NZ today.
Despite a balance of over 200,000 more Companies registered today, 2008's liquidations for the Jan - June tower over the current year to date by 65%.
Overall Liquidations 2020 v 2021
- The monthly liquidation numbers for 2022 are following the general trends of 2020 and 2021.
- However, liquidation numbers overall for 2022 (to end April) are even lower than 2020 and 2021. These were already record low years for liquidations.
- Will we see a spike in May, as in 2020 and 2021, or will liquidation numbers continue to decline?
- A decline seems unlikely, given the current economic climate, inflation & interest rate rises. If house prices start to fall substantially, we would expect to see a rise in insolvencies.
Insolvent v Solvent Liquidations
- In 2021, the number of liquidations peaked in March.
- Although solvent liquidations do not appear to follow a specific trend – towards the end of 2021, after the Covid-19 lockdown from August, there is an increase in solvent liquidations
Shareholder/Court/IRD Liquidation Numbers 2020 v 2021
Shareholder (and other) liquidation numbers have declined from 2020 to 2021; however, IRD liquidation applications and IRD Court liquidations have increased significantly from 2020. This has resulted in the overall increase in Court liquidations in 2021.
What has the IRD been up to?
- The non-IRD court applications (overall) have declined since 2019.
- However, the IRD applications dropped significantly between the 2 level 4 lockdowns. This is to be expected as the IRD is more centralised and government directives and policy drive their actions i.e., stop enforcement directives.
- The common market is not directed like this and so all other non-IRD applicants were less likely to stop collections during COVID lockdowns as the graph shows.
- The rate of court liquidation applications that turn into court liquidations are as follows: Year 2020: 43.6%; Year 2021: 64.67%; Year 2022: 46.67%
IRD Court Liquidation Applications 2020 v 2021
- In 2020, 1/3 of the Court liquidation applications were made by the IRD.
- In 2021, the number of IRD Court liquidations shot up, with the IRD making up circa 60% of the 560 Court liquidation applications.
If you have any questions related to the insolvency statistics or would like to chat with our team, please get in touch with us at [email protected] or call us on 0800 CLOSED.
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