China’s residential foreclosures increase 43% in 2023

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The number of foreclosed homes in China rose 43% year-on-year in 2023, according to a private survey on Monday, highlighting a worrying trend of rising mortgage delinquencies amid a sustained property market slump and a patchy 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.

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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, showed the survey.

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.