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Sales at one of China’s largest property developers fell by more than a third last year as the country’s real estate market struggled to emerge from a slowdown now in its fourth year.
Revenues at Country Garden fell 37 per cent to Rmb253bn ($35bn), the biggest annual drop for the group since a nationwide property crisis began in 2021 with the collapse of developer Evergrande.
Country Garden narrowed its loss to Rmb32.8bn after a record Rmb178bn in 2023, which was driven by a series of writedowns.
The slump in sales, which followed a default on a dollar bond in 2023, echoes a host of concerning metrics across China’s property market, from falling home prices to declines in construction.
Pessimism in the sector, which anchored economic growth for decades and became the country’s main store of wealth, has persisted, despite efforts from Beijing to restore confidence.
Country Garden is trying to forge a restructuring deal in Hong Kong, where only a tiny fraction of almost $150bn of bonds defaulted on by Chinese developers since 2021 has been recovered by investors.
The company is battling to complete unfinished projects and said the overall market was affected by a “declining sales rate”. It also cited “the impact of negative public opinion on the brand”.
Homebuyers have avoided private developers amid concerns that new apartments, which are typically bought before they are built, will not be completed because of a continuing cash crunch.
State-owned developers have seized market share as a result, and now dominate purchases of land in the most expensive cities.
Residential property sales by value edged down 0.4 per cent year on year in the first two months of 2025, according to official data, after a decline of 17.6 per cent last year.
Rating agency Fitch forecasts a 10 per cent decline in new residential property sales by gross floor area this year, citing “demographic shifts, high unsold inventory and low housing affordability”.
Country Garden’s sales dropped 38 per cent year on year in February, according to a regulatory disclosure. In the same month, it missed a deadline to reach an agreement with creditors on its offshore restructuring. It faces a Hong Kong court hearing in May over a winding-up petition.
The restructuring efforts relate to offshore assets and have had little impact on operations in the mainland, which enforces a separate legal code from Hong Kong’s.
Experts said almost no cash was flowing outside the mainland, where developers have far higher debt loads, with total liabilities of about $12tn, according to a 2023 official estimate.
Country Garden’s total debt increased slightly to Rmb254bn from Rmb250bn in 2023. Its bank and other borrowings rose to Rmb137bn from Rmb115bn.
Additional reporting by Haohsiang Ko in Hong Kong
