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According to data from the China Index Academy, in the first half of 2024, the total number of various types of properties sold in the national judicial auction market was about 78,500, an increase of about 5.8% from 74,200 in 2023, but the total transaction amount declined to 153.73 billion yuan, a decrease of about 4.32 billion yuan from the same period last year.

Between the hot and the cold, which signals are worth paying attention to?

The number of transactions has increased

In the first half of this year, the number of foreclosed properties was 382,000, 6,000 fewer than the same period last year.

While the number of listings has decreased, the number of transactions has increased, which seems to indicate that the transaction heat in the judicial auction housing market has increased.

Judging from the number of auctions, auctions of foreclosed properties were also quite active in the first half of this year.

Data shows that in the first half of 2024, the total number of judicial auctions for properties was 605,000, while in the first half of last year, the total number of auctions was only 427,000, an increase of about 42% year-on-year.

But if we look at the number of transactions, this year has only slightly increased compared to last year. From 75,000 in the first half of last year, it has risen to 79,000. A simple calculation shows that the transaction rate has dropped significantly, and the failure rate has increased.

Another piece of data also confirms this point: in the first half of the year, only 36.8% of the houses were sold in the first auction, a decrease of about 6 percentage points from the same period last year.

This means that more and more houses have to go through two or even three auctions before they can be sold.

Transaction price drops

The transaction price of foreclosed properties has come down this year.

In the first half of 2024, the average transaction price of various types of judicial auction properties was 5,147 yuan/square meter, while the average price in the same period of 2023 was 5,584 yuan/square meter, a year-on-year decrease of 7.8%.

In comparison, the decline in residential properties was not that large. The average transaction price of residential foreclosed properties in the first half of 2023 was 9,075 yuan/square meter, and 9,606 yuan/square meter in the same period of 2023, a year-on-year decrease of 5.5%.

In terms of discount rate (referring to the ratio of the final transaction price of the auction item to the estimated value of its commodity), among the 40 cities, the average transaction discount rate in 35 cities has been declining year-on-year, and in most cities it has fallen to around 70% of the estimated value.

The discount rate of residential foreclosed properties in Shanghai is 80.1%, which reflects the high value-preserving properties of Shanghai real estate from another perspective.

Taking a foreclosed house in a community on Yanchang Middle Road in Jing'an District, Shanghai as an example, it was sold in April this year for 5.17 million yuan, equivalent to 51,762 yuan per square meter.

On a second-hand housing transaction website, searching for relevant second-hand housing information in the same community, the listed price per square meter of high-rise second-hand houses for sale is between 60,000 yuan and 80,000 yuan, while the price of non-high-rise second-hand houses in the same community basically exceeds 90,000 yuan per square meter.

Residential housing accounts for the largest proportion

In the first half of the year, among various types of judicial auction projects, 53,000 residential properties were sold, accounting for 67.5% of the total number of units sold in all types of judicial auctions, and the total transaction amount was 76.53 billion yuan, accounting for 49.8% of the total transaction amount of all types of judicial auctions.

Although foreclosed properties also have the attributes of second-hand properties, they are not completely in competition with second-hand housing transactions in the general sense. The two have their own characteristics.

The sales area of ​​the second-hand housing market remained basically stable in the first half of 2024, especially compared with new homes. The average transaction share of second-hand homes in 20 cities rose to 62%, an increase of 9 percentage points year-on-year.

However, second-hand housing prices are still falling, with a cumulative drop of 3.61% in the first half of the year. The second-hand housing market shows a clear trend of "trading price for volume".

It is worth noting that judicial auction properties have their own particularities in the transaction process regarding purchase restrictions, final payment, etc. There are also related issues such as taxes and auction service fees.

It can be said that buying a foreclosed property carries more risks while enjoying a favorable price. Therefore, if you are interested in investing in a foreclosed property, you should choose a legal judicial auction platform.