China's Property Crisis Deepens: Rural Banks Struggle to Sell Seized Homes

• China's property crisis is now significantly impacting rural and regional banks, which are already strained by weak capital buffers and rising bad loans.
• Hundreds of thousands of foreclosed properties, seized by banks after borrower defaults, are failing to find buyers even with 20-30% discounts.
• A Reuters review of JD.com Asset Trading Platform listings shows a sharp surge in bank-initiated property sales in 2025, particularly in less-developed regions.
• The collapse of property as reliable collateral, coupled with falling prices and excess supply, has led to a broader loss of confidence in Chinese housing.
• Analysts warn of a potential second wave of bad loans as small business loans from the COVID-19 period mature, further pressuring banks and increasing foreclosures.

Why It Matters: China's property crisis is severely impacting rural banks, struggling to offload foreclosed homes despite deep discounts.