(Yicai) Nov. 14 -- Many Chinese local governments have begun auctioning properties they own through their asset management platforms or regular state-owned enterprises to raise funds to alleviate the financial pressure they are facing.

The state-owned enterprises in Sichuan province's Xichang recently split their 144 housing units into three packages and put them out for auction at a price slightly lower than local market price. Interested parties can pay a deposit to enter the auction and then bid online, a staffer responsible for the auction told Yicai.

These auctioned properties are mainly affordable houses, especially economically affordable houses, that state-owned firms hold on behalf of local governments, Yicai found.

Affordable houses are properties included in the policy-oriented housing initiatives launched by local governments to meet the housing needs of low- and middle-income groups, families with housing difficulties, and special groups, such as migrant talents and residents affected by demolition and relocation.

Economically affordable houses are the main type of affordable houses. Qualified applicants can purchase such properties at prices lower than the market rate and own partial or full property rights. Other forms of affordable housing include public rental houses and shared ownership houses.

The public resources trading platform in Fuzhou, southeastern Fujian province, recently announced it was auctioning 302 residential units owned by state-owned enterprises based in the city.

Several other cities, including Beijing, Guangzhou, Yantai, and Zibo, have also experienced similar instances where local state-owned companies have listed properties for sale.

One of the reasons for local state-owned firms auctioning properties could be that they have not been sold after completion, resulting in long-term capital being tied up, Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, told Yicai. Therefore, selling them can help alleviate financial pressure, he noted.

Moreover, under the premise of continuously declining property market prices, selling such houses as soon as possible can help owners avoid asset depreciation risks, Li added.

About the reasons why these properties could not be sold, Li said that their location and construction quality may not be as good as those of commercial houses. In today's context, where residence quality is highly valued, some qualified potential buyers may just not be interested in them.

The rise in popularity of this phenomenon can also be related to the local governments' recent efforts to actively convert state-owned resources into tradable assets, Song Hongwei, co-director of Tospur Real Estate Consulting, told Yicai. Selling these properties will help improve their financial strength.

Putting some over-supplied and long-idle affordable houses on the market will help improve the efficiency of asset utilization and maximize the principle of "making the most of what we have," Song noted.

Editors: Tang Shihua, Futura Costaglione