China foreclosures up by a third

The number of foreclosed homes in China jumped by over one-third to more than 700,000 in the first 11 months of last year from the year before but those in Shenzhen, especially the luxury types, remained highly sought after, according to data from China Index Academy.

Home foreclosures surged by 33.5 percent to 709,000 cases in the period, of which only 19.2 percent were successfully sold - down from 21.66 percent in the January-November period in 2022.

Among them, foreclosed flats in Shenzhen rose at a slower pace by 23 percent to 3,922 cases. Although the transaction rate slightly fell by 1.58 percentage points to 40.59 percent from 2022, it was still way better than the figure for the country as a whole.

Of these homes in Shenzhen, over 1,400 were purchased by the receivers with as many as 374 of them being sold for more than 10 million yuan (HK$11 million), topping other cities in the nation.

One of the homes was even sold for 204,000 yuan per square meter, up by 152.44 percent from the reserve price, indicating that the purchasing power of luxury flat buyers still exists even at a time the market is heading south, according to mainland media reports.

The reports added the property market may be on a path of recovery.

This came as Country Garden (2007) said its contracted sales more than halved to 174.3 billion yuan in 2023 as the presold gross floor area plunged by 51.3 percent to 21.7 million sqm.

In December, the developer's contracted sales hit a four-month high of 6.91 billion yuan but was still down by 68.7 percent from a year ago.

Its chairwoman Yang Huiyan has stepped down from the head of one of Country Garden's subsidiaries in Guangzhou, mainland media said.

Meanwhile, Dalian Wanda Group was reported to have prepared enough cash to repay part of the principal of a US dollar bond it extended earlier.

In other news, China's services activity expanded at the fastest pace in five months thanks to a solid rise in new business, with the Caixin/S&P Global services purchasing managers' index rising to 52.9 in December from November's 51.5 to stay above the 50-mark separating growth from contraction. It was the highest reading since July. Aided by robust new business expansion at the fastest rate since May, firms cited attributed rising customer numbers and spending for the improvement.

But UBS warned that the economic growth could slump below 3 percent this year if home prices fall at a faster pace.

The bank expects the growth to be at 4.4 percent this year, slower than over 5 percent last year, as the low base effect fades and the property crisis continues.