The Greater Toronto Area is experiencing an unprecedented spike in distressed property sales, with Power of Sale listings surging from just five in September 2020 to 472 last month, according to analysis by the Globe and Mail.
The crisis intensified throughout 2025, with the year already recording 1,232 new Power of Sale listings by September—surpassing all of 2024. Current active listings have increased 59% from the same period last year, with some estimates suggesting that as many as 780 such properties now represent roughly 3% of all GTA listings.
Power of Sale occurs when lenders force the sale of a property after mortgage defaults, allowing them to recover debt without taking full ownership through foreclosure. Unlike traditional foreclosures, homeowners retain title until the property sells but have no control over the process.
The surge reflects mounting financial pressure on homeowners who secured ultra-low mortgage rates during the pandemic. About 60% of mortgage holders renewing in 2025 and 2026 face payment increases, with monthly costs rising an average of 10% for those renewing this year, according to Bank of Canada analysis.
“I’ve been doing this for 50 years, and it’s been up and down for a lot of them,” said Howard Reininger, a lawyer representing institutional lenders. He added that the current volume overwhelms the system: “The problem now is not that there are so many defaults, you can’t deal with them.”
Economic conditions have compounded the crisis. Toronto’s unemployment rate reached 8.9% in August, well above the national average of 7.1%. Non-performing mortgages in the GTA have increased sevenfold in recent years, rising from an average of 0.06% between 2017-2023 to approximately 0.42% today.
The condo market faces particularly acute pressure, with condominiums representing 50% of Power of Sale listings in Toronto proper and 28% across the entire GTA. Some investors face additional pressure from falling property values that prevent them from securing financing to close on pre-construction purchases.
For over 25 years through September 2021, nearly all Toronto-area homebuyers experienced appreciation within 12 months, allowing them to tap equity when needed. Recent buyers lack this cushion — those who purchased since 2021 now face declining values rather than the reliable gains earlier generations enjoyed.
Industry experts warn the publicly available data likely understates the true level of distress, as major banks rarely disclose Power of Sale proceedings despite reporting mortgage arrears rates above industry averages. Some professionals are drawing comparisons to the aftermath of the 2008 financial crisis.
Power of Sale cases reportedly overwhelm the courts — some lawyers cannot secure motion appointments until April 2026.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
