Cities lift curbs to stimulate demand as China’s Country Garden seeks leeway on debts
ALBAWABA – Two more major Chinese cities announced lifting all restrictions on home purchasing on Monday, in a bid to boost demand in the sluggish properties sector as China’s Country Garden faces yet another debt crisis.
Two of the largest cities in China's second-most populous province of Shandong, Jinan and Qingdao, are following in the footsteps of other cities in China, according to Reuters.
The decision comes at a time when China’s debt-laden property sector is manoeuvring debt crises as it pushes through massive projects, domestically and abroad.
Last week, three cities - Nanjing in eastern Jiangsu province and Dalian and Shenyang in northeastern Liaoning province - became the first cities to eliminate curbs on home buying.
The city of Jiaxing, in the eastern province of Zhejiang, also announced it would lift all curbs in the city in late August, according to a local media report, as reported by Reuters. It previously limited the number of homes non-local residents could buy in the city.
Voting ends tonight on rescheduling dues of China’s Country Garden
Meanwhile, China’s Country Garden, the nation’s biggest private developer, is looking for a way to restructure its debts as it just got out of a debt maturity crisis.
On September 1, the company made the payment of $533 million, avoiding default in the 11th hour of the grace period after missing the due date on multiple dollar coupons in August.
Today, China’s Country Garden is on the verge of another crisis, as creditors convene for a new round of voting to extend several debt maturities worth $14.9 billion.
This photo taken on June 15, 2023 shows the headquarters of China's developer Country Garden Holdings in Foshan, in China's southern Guangdong province. (Photo by AFP)
The company’s cash level stands at around $13.85 billion, as of the end of June, according to Reuters.
In the offshore market, the developer has at least five coupon payments due this month. These include two relatively sizable dollar bond coupons worth $15 million and $40 million due on September 17 and September 27, respectively, each with a 30-day grace period, Reuters reported.
Noteholders have until 10 p.m. Beijing time Monday to cast their votes, according to Bloomberg, as focus turns to a $195.4 million note with a September 14 put option. The voting started September 7.
The outstanding principal of the securities stands at $1.5 billion, Bloomberg reported.
China's property sector has been in a struggling since 2021 when the government issued strict rules to stop indebted developers from accumulating more debt.
A sector-wide liquidity crunch followed, slowing down the completion of projects, weighing on home-buyer sentiment, curbing demand and depressing prices.
The authorities rolled out a series of support measures over the last few weeks for the property sector, including lowering existing mortgage rates and preferential loans for first-home purchases in big cities.
Notably, China’s property sector accounts for roughly a quarter of the Chinese economy and a recovery is crucial to Beijing's plan to shore up the sputtering growth in the world's second-largest economy.
