Foreclosures in China Soar, Threatening to Choke Off Bank Profits

Published On Nov 4, 2024, 5:00 AM

China's housing market is experiencing significant turmoil, with a notable increase in mortgage defaults leading to more banks foreclosing on properties. The number of foreclosures surged by 43% last year, and legal proceedings for evictions are becoming strained. Many apartments are being auctioned even while occupants are still inside, creating additional challenges for buyers. The situation is putting pressure on financial institutions in China as they face losses from real estate investments, unfinished projects, and declining asset values used as loan collateral. Despite government efforts to stimulate lending to the real estate sector, banks are struggling under these conditions.