April 27, 2026 | The Exits are Being Barricaded

Happy Monday Morning!

Real Estate foreclosures are ramping up, and the stigma of defaulting is starting to fade. Our recent piece on The Loonie Hour Substack, guest authored by Ben Rabidoux highlights why strategic default is turning from a “moral failure” into a mainstream financial strategy.

Yes, media articles are now recommending it could make more sense to simply walk-away from your Real Estate.

And that’s exactly what’s happening, although its largely concentrated in the new condo space.

“I’ve been a real estate lawyer for almost 50 years, and I’ve never seen anything quite like this,” said Vancouver-based real estate lawyer, Perry Ehrlich.

The pre-sale condo collapse is well documented, with more buyers walking away. That’s an issue likely to grow with OSFI desperately trying to pull the rug on blanket appraisals which have, in many cases, ignored market values and financed buyers up to 100% LTV using stale appraisals on new condo units.

Defaults on pre-sale condos are increasingly common, yet actual mortgage defaults remain low from a long term historical basis. As my friend Ben Rabidoux points out in his piece on The Loonie Hour Substack, mortgage defaults in Canada are still below their 30 year average.

However, the three month change in mortgages going delinquent has surged by 1,200. You have to go back to Q2 2020 when the world locked down (and before the federally-imposed COVID “mortgage payment holiday”) for the last time delinquencies moved this sharply.

Meanwhile, the number of court-ordered listings currently on the MLS, it’s reaching fresh record highs across Metro Vancouver.

There’s nothing to suggest this is going to ease anytime soon. Falling home prices and rents are leaving property owners with fewer options to get themselves out of the jam. They used to say a rolling loan gathers no loss, but with prices falling the ability to refinance the debt is becoming more difficult.

I’d also turn your attention to what’s happening in the pre-sale assignment market. Despite a plethora of new condos in the pipeline nearing completion, assignment listings on the MLS are collapsing.

This is happening because developers are increasingly restricting pre-sale buyers from listing inventory on the MLS as they attempt to limit price discovery which could impair appraisal values for other buyers in the building, not to mention the record supply of unsold inventory they’re also holding.

The exits are being barricaded. Expect more defaults to come.

It’s a pretty negative outlook, but for astute buyers, opportunities commeth.

Steve Saretsky April 27th, 2026

Posted In: Steve Saretsky Blog

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