Another Big Chinese Property Domino Is Wobbling

livemint.com:

reality quickly set in again. Contracted sales at the country’s top 100 developers plunged 33% from a year earlier in July, according to China Real Estate Information. In the first seven months combined, sales for those developers have now fallen 5% year over year, wiping out all the progress notched at the beginning of the year immediately after China abandoned its strict pandemic control policies.

Country Garden’s contracted sales in July were down a vertigo-inducing 60% year on year. Plunging sales translate into less cash to repay liabilities and finish projects. Country Garden has nearly $2 billion of bonds that will come due or be eligible for early redemption this year.

The company had been considered one of the stronger private developers still left standing. Yet sluggish housing markets mean no one—especially among private developers—is really safe. Moreover, Beijing’s latest moves to support the sector—including making it easier to buy an apartment—don’t seem likely to help much.

The fact that even the biggest developers can still run into trouble, nearly two years after Evergrande’s struggles first reached a fever pitch, presumably gives potential home buyers little confidence. The bitter truth is that there is probably no easy way to quickly turn around the market without igniting another property bubble. Speculative demand for housing—in the form of second and third, often unrented homes—supported the market for years, helping paper over China’s weak demographics.