China's Property Crisis: Foreclosed Holdings Drown Rural Banks

Chinese rural banks are struggling to auction off hundreds of foreclosed properties despite significant discounts, exacerbating the real estate crisis and impacting the financial sector and economy. Properties, traditionally solid collateral, have depreciated considerably, revealing the challenges faced by smaller banks amid increasing bad loans and limited capital buffers.

Amid severe depreciation in China's housing market, rural banks struggle to sell foreclosed properties despite hefty discounts, exacerbating the crisis and risking broader economic stability.

A Reuters review reveals a surge in bank-initiated property sales at discounts of 20-30%, reflecting the desperation of smaller banks confronting mounting bad loans and limited capital reserves.

As major property firms collapse and home sales plummet, experts warn of further declines, questioning the sustainability of discount-driven sales amid limited official intervention and ongoing economic strains.

(With inputs from agencies.)