The number of mortgage delinquencies in China rose 43% year-on-year in 2023, according to a private survey on Monday.
The intensifying trend of foreclosed home deals highlights the dismal state of the country prolonged property market slump as well as its bumpy economic recovery.
The number of foreclosed homes up for auction stood at 389,000 units last year, said China Index Academy, a major independent real estate research firm. A total of 99,000 units worth a combined 150 billion yuan ($20.84 billion) were successfully sold at auctions, the firm said.
Total foreclosures, including commercial, residential and industrial properties, land, garages and parking spaces, totalled 796,000 units, a record high. The number was up 36.7% from 2022, the group said.
Last year, the troubled property market saw the worst decline in new home prices in nearly nine years, dragging on the broader recovery.
China’s economy grew 5.2% last year, as credit has been diverted from the property sector towards manufacturers and as investment into infrastructure held up.
The southwestern second-tier cities of Chongqing and Chengdu were the most affected by home foreclosures, logging in the most auctions last year, China Index Academy said.
The number of foreclosures has been gradually rising since 2020, the firm said, and the number has continued to rise in the early days of 2024.
E-commerce company JD.com’s said earlier this month its online auction platform has sold 11 homes worth more than 10 million yuan each in the first ten days of January.
JD.com said it planned more auctions of luxury homes in top-tier cities including Beijing and Shanghai during the Lunar New Year holidays.
- Reuters with additional editing by Jim Pollard
NOTE: Updated on January 22, 2024 with minor edits to the subhead.