Chinese Banks Directly Selling Houses at Heavy Discounts

Experts warn that as property prices keep sliding amid weakening economic conditions.

Published: 11/18/2025, 11:56:49 AM EST

Chinese Banks Directly Selling Houses at Heavy Discounts — A general view of residential buildings in Hegang city in northeastern China's Heilongjiang province on July 4, 2023. (Jade Gao/AFP via Getty Images)

For struggling home sellers in China, insult has been added to injury—Chinese banks have now entered the market directly, selling repossessed properties at prices far below market value.

Since the beginning of November, multiple Chinese media outlets have reported on this unprecedented phenomenon of banks acting as direct sellers. Unlike the slow and complicated judicial auction (foreclosure) process, commercial banks are now taking a more direct and quicker approach to accelerate cash inflow.

From metropolitan cities to small county towns, the supply of bank-owned properties is huge, and the prices are surprisingly low.

For instance, on Singles’ Day (Nov. 11)—China’s version of Black Friday—a 176 m² (1,894 sq. ft.) apartment in Harbin was sold for just 315,000 RMB ($44,000)—a jaw-dropping discount—half price of the same unit in the same community.

Wu, a real estate agent in Wuxi, told the Chinese edition of The Epoch Times that bank vendors have become “a hot topic recently.” He said many banks now hold a large number of repossessed properties and “can’t wait any longer.”

He explained that banks are pricing these properties 30 percent lower, or even 50 percent, and in desperate cases up to 70 percent off, delivering a severe blow to the already devastated Chinese housing market.

According to data from China’s two major property e-commerce platforms—Alibaba Assets and JD Assets—the Economic Observer Newspaper reported that, since the beginning of 2025, Agricultural Bank of China has listed 649 properties for direct sale. Among them, a two-bedroom apartment in Zhongshan District, Dalian, was put up for bidding on Oct. 24 with a starting price of 610,000 RMB ($85,000).

Additionally, regional commercial banks have also been active: Jilin Bank has listed 2,099 properties, Tianjin Bank 1,227, Zhongyuan Bank 521, Wenzhou Bank 412, Dalian Bank 226, and Harbin Bank 159.

Compared to large state-owned banks, joint-stock banks, and city commercial banks, the rural credit cooperative systems—local, grassroots financial institutions that primarily serve rural areas in various provinces—are directly selling properties on an even larger scale.

Banks Turned Vendors

Why are banks selling houses directly instead of relying on court-run judicial auctions for foreclosed properties?

The main reason is that judicial auctions have become ineffective, time-consuming, and have ultra-low returns.

According to data from the China Index Academy, in October 2025 alone, 106,000 properties were put up for judicial auction nationwide, down 12.5 percent year-on-year. Only 16,000 units were actually sold, down 7.3 percent year-on-year, and the clearance rate (successful transaction rate) was a mere 14.9 percent. This means banks don’t achieve much through the judicial auction channel.

On the other hand, the entire auction process—from loan default, to the litigation, then judicial auction, and the final sale—might routinely take up to two to three years or longer. During that period, the risk of further asset depreciation kept rising.

Moreover, Chinese regulations require banks to dispose of non-performing assets within a maximum of two years. Faced with these constraints, banks would rather take matters into their own hands: they sue the mortgage holder, getting the court to directly award ownership of the foreclosed property to the bank itself, and then sell the property directly.

A Deeply Bearish Market

Experts warn that as property prices keep sliding amid weakening economic conditions, the trend is dealing a severe blow to an already fragile housing market.

Chen, a real estate agent in Shenzhen, told The Chinese edition of the Epoch Times, “Banks selling houses directly is definitely pushing prices down further. But price isn’t the only problem right now—the real issue is that nobody is buying. There are tons of desperate sellers and very few buyers. If there are any prospective buyers, they haggle relentlessly.

“Even agents have lost momentum and seem more sluggish than before,” he said.

Across 70 major cities in October, sales prices of commercial residential properties fell both month-on-month and year-on-year in almost all cities, according to official statistics.

Wu said he was “certain” prices will keep falling—now buyers are just sitting on the sidelines and observing. “Even those with cash are not jumping into the market.”

Chen added: “The more owners cut prices, the more buyers wait. Both sides are afraid prices will keep dropping, so they refuse to catch a falling knife.”