Evergrande’s deepening crisis weighs heavily on major Chinese developers’ sales in September

Name: Unpaid by Evergrande, supplier sells car and home to rescue his business
Uploaded: 2021-10-08T06:56:20.000Z
Duration: 2 min 25 s
Description: Unpaid by Evergrande, supplier sells car and home to rescue his business

The country’s top 100 real estate companies saw overall sales sink 36 per cent year on year to US$118 billion in September: China Real Estate Information Corp

Chinese property shares fell on Friday, while investor concerns about developers’ liquidity mounted after Fantasia bonds were suspended from trading

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An unfinished residential building is pictured through a construction site gate at Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China, on September 16, 2021. Photo: Reuters

Bloomberg

Published: 2:56pm, 8 Oct 2021Updated: 2:56pm, 8 Oct 2021

Major Chinese developers saw their sales plunge last month as China Evergrande Group sank deeper into crisis, putting more pressure on the government to limit the fallout.

Combined contracted sales by the country’s top 100 real estate companies plummeted 36 per cent to 759.6 billion yuan (US$118 billion) in September from a year earlier, deepening a downward spiral emerging in July, China Real Estate Information Corp (CRIC) said in a report. More than 90 developers saw a decline in their sales from a year ago, with 60 per cent of them recording a drop of more than 30 per cent, according to the report.

Under the current market conditions, real estate enterprises need to speed up development, ensure supply, strengthen marketing and accelerate sales to recoup cash in the fourth quarter, the official Shanghai Securities News cited Lin Bo, general manager of the property consulting firm, as saying in a report.

“In the medium to long term, reducing leverage is still the focus of real estate enterprises,” Lin added.

02:25

Unpaid by Evergrande, supplier sells car and home to rescue his business

China’s relentless efforts to cool its property market and rein in financial risks have resulted in a sharp drop in real estate demand in the past few months, squeezing heavily indebted developers like Evergrande and sparking concerns of debt woes spreading. Mid-sized Fantasia Holdings Group, which develops high-end flats and urban renewal projects, defaulted on a dollar bond earlier this week, reigniting investor angst over other highly leveraged borrowers.

Chinese property shares fell on Friday, while investor concerns about developers’ liquidity mounted after Fantasia bonds were suspended from trading. In the mainland stock market, an index tracking the shares of developers sank as much as 1.4 per cent, while the Hang Seng Property Index in Hong Kong was down as much as 1.3 per cent.

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