The other thing to bear in mind Kincella is that of that percentage that could be considered to default they are not all going to default at the same time instead it is likely to happen over a few years. So the total stock on the market at any one time will be lower again even if you consider it takes considerably longer to sell.
Furthermore given that these will be foreclosure sales then in the majority of cases the "owners" would have been evicted at a minimum weeks if not months before + if you consider the properties will be on the market longer there will be a whole series of vacant properties for sale that will be vacant for months which will mean that additional pressure will be placed on existing rental stock.
The only areas that should be concerned are some of the larger towns that are dependant on a particular industry as if that industry closes down then properties in that area could be in for massive drops if the majority move away for better employment prospects.
