Key facts
- New home prices in China fell 0.1% in August, matching the decline in July and June.
- On an annual basis, new home prices dropped 3.0% in August, narrowing from a 3.2% fall in July.
- The number of properties listed for court-ordered auction across 355 Chinese cities reached 539,000 in the first seven months of the year, up 23.7% from a year earlier.
- Auction prices for seized homes fell 9% year-on-year in the first seven months of the year.
- About one-third of listed auction homes found buyers, selling at prices roughly 30% below comparable properties in the secondary market.
- Home prices in the secondary market in China’s first-tier cities fell 3.7% year-on-year in July.
China's new home prices continued to fall in August, mirroring declines in the previous two months and highlighting the ongoing struggles within the country's property sector. Official data from the National Bureau of Statistics revealed a 0.1% month-on-month decrease in new home prices, the same rate as in June and July. Annually, prices were down 3.0%, a slight improvement from the 3.2% drop recorded in July, representing the slowest pace of decline this year.
The property slump is being exacerbated by a significant increase in court-ordered auction homes. In the first seven months of the year, 539,000 properties were listed for auction across 355 Chinese cities, a 23.7% rise from the previous year. These auction prices have fallen by 9% year-on-year, as courts and asset managers attempt to offload properties seized from defaulting borrowers. Reports indicate that only about a third of these auction homes have found buyers, with prices averaging 30% below comparable secondary market properties, and even steeper discounts in smaller cities.
This influx of discounted properties has created a psychological barrier for potential buyers, reinforcing expectations of further price drops. Demand is increasingly concentrated on well-located properties in top-tier cities, leaving remote or older properties largely overlooked. Columnists note that the rise in auction transactions reflects sellers' efforts to clear backlogs through price cuts rather than a resurgence in buyer confidence. For existing homeowners looking to sell, particularly those aiming to upgrade, the inability to sell their current homes at a desired price is a significant challenge, emphasizing the importance of liquidity over paper value. As of April 2026, approximately 8 million people were listed as loan defaulters, with a substantial portion being under 35 years old. Many of these individuals face a situation where their property's value has fallen below their mortgage balance, leading to potential auction and significant debt burdens. Job losses in sectors like real estate and private tutoring have contributed to mortgage defaults, making giving up a home a last resort for many families.