Country Garden’s home sales slump persists as aid fails to help
COUNTRY Garden Holdings’ home sales continued to slump last month, adding to the Chinese developer’s woes as it tries to avoid liquidation.
Contracted sales dropped 73 per cent to 4.3 billion yuan (S$804 million) in June from a year earlier, following a 76 per cent slide in May, a filing by the Guangzhou-based company showed.
Distressed Chinese developers are counting on a turnaround in sales to increase their chances of survival as the housing downturn enters its fourth year. Country Garden is fighting a creditor’s petition in a Hong Kong court to wind up the company following its 2023 default on US dollar debt.
The nation’s biggest cities – Shanghai, Beijing, Shenzhen and Guangzhou – have eased homebuying rules after the central government unveiled a broad real estate rescue package in May. But that will do little to help Country Garden if it diverts demand away from the lower-tier cities where the developer does much of its business.
Adding to its woes, Country Garden will be removed from the Hang Seng family of indexes including the Hang Seng Composite Index after market close on Jul 9 due to its prolonged suspension of trading, according to a stock exchange statement on Tuesday.
The company’s flat month-on-month home sales compares with a 36 per cent increase at the 100 biggest real estate companies tracked by CRIC.
The developer’s crisis entered a new chapter in March when it made a surprise announcement that it will miss a deadline for reporting annual results due to insufficient information. BLOOMBERG
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