The rise in Power of Sale listings across Ontario has captured the attention of both buyers and investors. But as this trend gains momentum, an important question emerges: Are these listings a smart opportunity — or a hidden risk?
Understanding the Shift
Over the past several months, more homeowners have defaulted on their mortgage obligations, leading to an increase in Power of Sale properties coming to market.
In Ontario, a Power of Sale allows lenders to sell a property after a borrower defaults on their loan, recovering the debt owed. Unlike in other provinces where foreclosure is the norm, Ontario’s legal framework enables lenders to act faster — often within three months of default, once proper notice has been given.
This legal distinction has made Power of Sale listings a growing feature of the current real estate landscape, particularly in high-demand areas like the Greater Toronto Area.
Why It’s Happening Now
Several market forces are contributing to the uptick in Power of Sale activity:
Mortgage renewals at higher rates: Many homeowners who bought or refinanced during the ultra-low-rate period are now facing renewal shocks.
Rising living costs: Inflation and higher household expenses are squeezing budgets.
Extended days on market: Slower resale activity means some sellers are missing windows to cash out before defaulting.
Combined, these pressures are bringing more distressed properties into circulation.
Risk vs. Reward
At first glance, Power of Sale listings might appear to offer discounted prices — but the reality is more complex.
Under Ontario’s Mortgages Act, lenders are obligated to sell these properties at fair market value, not below. This means the deep discounts some buyers expect are rare.
In addition, Power of Sale homes are sold “as-is”, which introduces significant risk. Buyers may inherit:
Hidden structural or maintenance issues
Unpaid utility or property tax bills
Legal complications related to title or possession
For experienced investors, these risks can be managed with proper due diligence, inspections, and legal review. But for first-time buyers, they can lead to unexpected costs and complications.
The Investor’s Edge
Because of these complexities, Power of Sale opportunities are often better suited for seasoned investors who understand risk management, renovation costs, and exit strategies.
For those who know how to navigate them, Power of Sale listings can occasionally present value — particularly in prime locations where fundamentals remain strong.
But success depends on a careful balance of strategy, timing, and experience.
The Morris Code Perspective
The rise in Power of Sale activity is a signal worth watching — not just for what it means for distressed sellers, but for what it reveals about the underlying health of the market.
While opportunities may emerge, the smart approach is one guided by due diligence, patience, and professional advice.
If you’re considering a Power of Sale purchase, work with a realtor and legal team who understand the process inside and out.
The Morris Code | Market Insight — informed perspectives for a shifting market.
