Aug 12, 2024 08:29 PM
BUSINESS
Foreclosures Rise in China as Homeowners Struggle to Repay Mortgages
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A project that has been abandoned for nearly a decade is now under construction in Zhengzhou, Henan province, Sept. 3, 2023. Photo: VCG
The number of foreclosed homes on the market in China rose more than 12% year-on-year in the first half of 2024, a new report showed, reflecting the growing struggle of homebuyers to repay home loans amid the prolonged real estate slump.
A total of 202,000 foreclosed homes were listed for sale in the first six months of this year, according to a report published Friday by research firm China Real Estate Information Corp. (CRIC).
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- China saw a 12% year-on-year increase in foreclosed homes listed for sale, totaling 202,000 in the first half of 2024, per CRIC.
- Falling home prices and increased secondary auctions have contributed to a 6.7% decline in the average price of foreclosed homes sold.
- Banks are negotiating with borrowers to extend mortgage terms due to declining home values and a decrease in foreclosure sales transactions.
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Who’s Who
- China Real Estate Information Corp.
- China Real Estate Information Corp. (CRIC) is a research firm that published a report highlighting a 12% year-on-year increase in foreclosed homes in China for the first half of 2024. The report details the challenges faced by homebuyers in repaying loans amid the property market slump and the rising number of foreclosed homes, with notable data on regions like Zhengzhou.
- China Index Academy
- The China Index Academy (CIA) provided data indicating that the average price of foreclosed homes sold nationwide in the first half of 2024 fell by 6.7% to 9,084 yuan ($1,265) per square meter. The CIA noted that a rise in the proportion of foreclosed homes sold through secondary auctions, where prices are lower than initial auction prices, contributed to this price drop.
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What Happened When
- Since 2023：
- People have increasingly failed to keep up with their mortgage payments, leading to some properties going into foreclosure.
- The first six months of 2024：
- The number of foreclosed homes listed for sale in China rose more than 12% year-on-year.
- The first six months of 2024：
- 5,178 foreclosed residential homes were listed for sale in Zhengzhou, marking a 43% increase from the same period last year.
- The first half of 2024：
- The transaction rate of foreclosed homes was 17%, down 7 percentage points from a year earlier.
- January-June 2024：
- The average price of foreclosed homes sold nationwide fell 6.7% to 9,084 yuan ($1,265) per square meter.
- By August 9, 2024：
- A total of 202,000 foreclosed homes were listed for sale in the first half of 2024, according to CRIC's report.
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