Recently, several banks in China have been accelerating their direct property sales operations, attracting market attention. Many of these properties stem from companies or individuals defaulting, and after being recovered through legal procedures, banks are bypassing traditional foreclosure processes and selling them online under the name of “direct supply from the bank,” with prices even at a discount of up to 70%. Four real estate agents from different regions interviewed by Epoch Times revealed the current situation in the Chinese real estate market of “price but no market” and the practice of trading price for quantity.
Including Agricultural Bank, Construction Bank, and Bank of Communications, among others, several banks are now pushing a large number of distressed properties directly to the market at an unprecedented scale and speed.
On asset trading platforms, the tag “direct supply from the bank” stands out prominently, with numerous properties available from top-tier cities to small county towns, and the discount rates are staggering. On “Double 11” day, a 176-square-meter residential property in Harbin was sold for a discounted price of 315,000 yuan, at only 1,800 yuan per square meter, while the lowest price for a similar unit in the same area is 3,700 yuan per square meter.
Mr. Wang, a real estate consultant in Hefei, Anhui, mentioned during the interview that banks selling properties directly is closely related to the fact that banks have been heavily involved in real estate lending for decades. He noted that with a large number of foreclosed properties, banks’ bad debts are increasing, posing risks to the financial system. If banks do not step in to sell these properties, the market would collapse, leading to a potential economic crisis in China, where people might struggle to even afford food.
Mr. Wang remarked that currently, the five major banks in China are directly providing properties, and in the future, more banks in many cities will likely follow suit.
The primary reason for banks accelerating the direct sale of properties is the urgent need to deal with the increasing amount of non-performing assets to stop the bleeding and recover funds.
Mr. Wu, a real estate agent in Wuxi, mentioned during an interview that direct property sales by banks have become a recent hot topic. Some cities have already adopted this practice. Currently, many banks hold large amounts of distressed properties that have defaulted. Banks have circumvented the foreclosure process because waiting for a year to enter the legal process is no longer feasible for them.
Mr. Wu disclosed that in September, a friend from a bank revealed that their bank was engaging in such activities, and they had clients interested in discussions.
He mentioned that the banks’ objective is to recover funds, and prices could be discounted by 30%, 50%, or even 70%. While this approach impacts property prices and current sellers, it is a necessary choice for the banks to address their assets and recover their investments.
Mr. Feng, a real estate agent in Xi’an, stated during the interview that the prices of the properties directly sold by banks are likely to be offered at a 30% discount. At present, in many areas, property prices have already plummeted, and even after selling the properties, the revenue might not be enough to cover the bank loans. Many of these properties are owned by individuals who defaulted and are now blacklisted by credit authorities. Directly selling these properties is a way for banks to manage their assets to break even.
While banks have been offering properties directly for sale for some time, the quantity of such sales has significantly increased in recent years, with some banks listing thousands of properties. Chinese media analysis suggests that the collective selling of properties by banks is related to the continuous downturn in the property market, the surge in default properties, and debts for equity swaps. The slow progress in traditional foreclosure processes has pushed banks to seek faster liquidity channels. As the year-end assessments approach, banks aim to quickly reduce their non-performing mortgage rates on their balance sheets. A research report from Kaiyuan Securities stated that the mid-year report for 2025 showed an overall increase in the non-performing mortgage rates of listed banks. Non-performing loans for personal business operations are on the rise.
Mr. Wu also revealed that many banks are now negotiating directly with defaulters: signing agreements to help them sell their properties, whereby if the selling price is higher, the surplus goes to the defaulter, and if it is lower, it covers the bank loan. Despite banks directly selling properties, they still require the assistance of agents to carry out the procedures, some of which need professionals to manage.
In recent years, Lanzhou Bank has auctioned over 3,000 properties on the JD Financial Assets platform, with listing prices ranging from tens of thousands to hundreds of millions yuan. In 2024, the bank listed 1,130 properties for direct sale, increasing to 1,779 properties in 2025, showing a significant expansion in scale.
The emergence of bank-direct properties, especially with extreme discounts, has had a profound impact on the already fragile real estate price system.
Mr. Chen, a real estate agent in Shenzhen, mentioned during the interview that direct property sales by banks will definitely impact property prices. In the period from 2021 to 2022, when foreclosed properties in an area were sold at a 30% discount off market price, it significantly lowered the overall average transaction price in that region.
However, price is not the only issue. Mr. Chen pointed out that the current real estate market is facing a problem of “price without market.” The more severe issue is that properties are not selling. Buyers are aggressively bargaining, trading price for quantity is commonplace, and unsold properties are a major headache for the market—many property sellers with little interest from buyers. The supply-demand relationship is severely skewed.
He revealed that currently, a single agency can have access to hundreds of properties. Calculating based on a typical listing ratio of 7%, an agency can cover an area of a few hundred meters in all directions, where property owners will list their properties for sale with that agency. It is normal for an agency to have hundreds of properties on hand. However, the number of properties an agency can sell each month is limited. On average, an agency sells 0.78 properties per month (some not selling any). This is why many properties are listed but receive no inquiries for a long time.
“There are no clients coming to the agency to inquire about properties nowadays. Moreover, agents are not as proactive in selling properties as before, they are very lazy, and not as efficient,” said Mr. Chen.
Regarding the future of the real estate market, Mr. Wu from Wuxi stated, “I believe that the trend of declining property prices is undeniable. Last year, the real estate market lacked liquidity. Many people are observing, and some with funds are not buying.”
Mr. Chen from Shenzhen believes that the more owners reduce prices, the more hesitant buyers become. The real threat is the lack of interest from potential buyers. Sellers are worried about further price drops, while buyers fear purchasing when prices could decline, leading to both sides hesitating to make transactions.
Mr. Feng from Xi’an mentioned that the prices of many properties in Xi’an have dropped by 30%, and the proceeds from selling these properties may not be enough to repay bank loans. Old and worn-out properties within the second ring road in Xi’an, along with aged high-rise buildings over ten years old, lack proper amenities in the community, have mediocre schools in the vicinity, and poorly maintained surroundings; these properties are challenging to sell even after significant price reductions, due to lack of demand.