Wednesday, December 24, 2008

Power of Sales (Foreclosures) in Toronto Trending Up

In this entry, we'll have a look at the situation in "power of sale" listings in the Greater Toronto Area (GTA). While "foreclosure" is a term commonly used in the U.S., in Canada (at least in Ontario anyways), it is called "power of sale". A power of sale is the sale of a property by the lender, be it a bank, financial company or other individual.

The first chart below shows the number of monthly new contracts to list properties on the MLS as power of sale in the GTA. The numbers are counted by looking at seller names whereby the name contains either "bank" for "financial". For example, if Royal Bank lists a property as a power of sale, the seller name is listed as "Royal Bank".

Not exact science since the seller name(s) for some non-power-of-sale listings contain the word "bank", but it's good enough to give us a sense of where things are going. We can see from the chart that, though the situation isn't alarming quite yet, the trend in power of sales listings is slowly trending up for the past couple of years. It will be interesting to see how this chart takes shape in 2009.

The next two charts show the break down of power of sale listings by banks, for the period between January-November 2007 and the period between January-November 2008, respectively. We can see that Royal Bank has the highest proportion of the power of sale listings - not surprising since it is the largest bank in Canada. However what is interesting to note is that, in 2008, the proportion of power of sale listings for the other major banks increased.

The final chart shows the change in each bank's share of power of sale listings from 2007 to 2008 (January to November).


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