Beijing: Amid the economic crisis in China, an estimated 233 home developers filed for bankruptcy last year, Taiwan News reported quoting the China Real Estate Association.

According to the report, the highest number of applications were received from the Zhejiang province with 36 cases, accounting for 15.45 per cent of the nation's total. Hunan and Guangdong provinces were second and third, respectively.

The report stated that the number of bankruptcies for 2023 was the lowest since 2020. As many as 408 home developers filed for bankruptcy in 2020, the first year of the Covid-19 pandemic, 343 in 2021, and 308 in 2022.

The economic downturn caused home developers in third- and fourth-tier cities to suffer the most. Even so, the overall impact of bankruptcies is expected to be limited, according to the report.

China-based CRIC Securities' research department indicated that home sales in China continued to dwindle in 2023 and challenges would persist in 2024 despite favorable policies. Low consumer confidence and inventory overhang means China's housing market could remain sluggish for a long while.

Earlier last year, a US-based news daily reported that the construction sites around China appear visibly less busy and construction of apartment towers has faltered because of falling apartment prices.

Quoting data released for prices of new apartments in 70 large and medium-sized cities across China, Goldman Sachs calculated that prices fell in August at a seasonally adjusted annual rate of 2.9 per cent, compared with 2.6 per cent in July.

Moreover, the data shows that new apartments considerably understate the speed and extent of price declines, however, as local governments have put heavy pressure on developers not to cut prices.

Prices of existing homes in 100 cities across China fell an average of 14 per cent by early August from their peak two years earlier, according to the Beike Research Institute, a Tianjin research firm. Rents have fallen 5 per cent.

Apart from this, China's banking sector is also struggling with the repayment of debt payments from defaulters as loans that banks have made to property developers have been defaulted.

According to The New York Times, the main barrier behind the immediate repayment of loans from defaulters is the involvement of loans to the local governments and their financial affiliates.

Earlier, the central bank, the People's Bank of China, announced that it was freeing banks to set aside smaller reserves and start extending more credit. The move was widely seen as intended to accommodate a large batch of bonds that local and provincial governments will issue to pay for their infrastructure projects, reported The New York Times.

This report is auto-generated from news service agency