Country Garden sees home sales jump as Beijing’s rescue package gives developers a boost

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The Foshan-based company that was once China’s top home builder by sales shifted 4.29 billion yuan (US$592 million) worth of properties last month, an 11.4 per cent monthly increase. Photo: Bloomberg

Cheryl Arcibal

Published: 9:35pm, 5 Jun 2024

Country Garden sold more properties in May, becoming the second major Chinese developer to see its turnover improve after Beijing launched a historic rescue package to shore up its battered real estate segment.

The Foshan-based company that was once China’s top home builder by sales shifted 4.29 billion yuan (US$592 million) worth of properties last month, equivalent to 440,000 square metres (4.7 million square feet) of gross floor area, according to a filing with the Hong Kong stock exchange on Wednesday.

That was 11.4 per cent higher than its April sales of 3.85 billion yuan for contracted gross floor area of about 430,000 square metres.

It was about the same increase as that seen by China Vanke, another crisis-hit developer, which said home sales in May rose 11.3 per cent from the previous month to 23.3 billion yuan, in a filing on Monday with the Shenzhen Stock Exchange.

“Improvement in sales sentiment has been observed in top-tier cities,” said Martin Wong, a senior director at Knight Frank. “The recovery is concentrated in tier 1 and some tier 2 cities, but it will take time to see if the recovery can be sustained as the economy and buyers’ confidence remain weak.”

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The improvement in sales for the developers has come in the wake of a stimulus package rolled out by the Chinese government in May that included a 300 billion yuan relending facility and cuts in mortgage rates.