Agencies
Beijing
Country Garden Holdings’ sales slump dragged on in July, adding to the Chinese developer’s woes as it tries to avoid liquidation. Contracted sales for July dropped 72 percent from a year earlier to 3.4 billion yuan (S$630 million), following a 73 per cent slide in June, corporate filings show.
The tally was 21 percent lower from the previous month.
The distressed real estate giant is counting on a turnaround in sales to increase its survival chances, as it fights a winding-up petition in a Hong Kong court following its 2023 default. Last week, it was given more time to work on an offshore debt-restructuring plan when the case was adjourned to January.
"Buyers’ concerns around Country Garden’s liquidity mean they are likely to avoid its projects until fully completed,” Bloomberg Intelligence analyst Kristy Hung said on August 1.
Country Garden’s month-on-month decline in home sales is smaller than the 36 percent slide at the 100 biggest real estate companies tracked by China Real EstateInformation.
A recent rescue package has failed to revive China’s housing market, which remains a major drag on economic growth. In June, new home prices fell at close to the fastest pace in almost a decade, giving people less reason to invest inproperty.
China’s real estate industry has been facing a major financial squeeze since 2021 when the government introduced measures to curb the amount big developers could borrow.
Problems in the country’s property market are having a major impact as the sector accounts for around a third of the economy.