China’s real estate giant, Country Garden, has reported a significant increase in net losses for the first half of the year, according to its latest financial report. This serves as the latest sign of the worsening downturn in the Chinese real estate market.
As disclosed in documents submitted to the Hong Kong Stock Exchange on Friday, August 29th, the net loss for the first half of 2025 amounted to 19.08 billion yuan as of June 30th. Although the loss fell within the company’s previously announced range, it marked a 49% increase compared to the same period in 2024 (12.84 billion).
Country Garden attributed the losses to two main factors: a notable decrease in the scale of real estate development project settlements, coupled with low gross profit margins; and an increase in asset impairment.
The prolonged four-year real estate crisis in China has intensified in July, posing a particularly severe blow to heavily indebted construction firms like Country Garden. Meanwhile, the defaulting company is seeking to postpone the liquidation process in Hong Kong to continue debt restructuring.
Country Garden, headquartered in Foshan, Guangdong Province, was once the largest real estate developer in China by contracted sales. Since defaulting in 2023, the company has been negotiating the restructuring of overseas debts worth billions of US dollars with creditors. Last week, Country Garden announced that over 77% of noteholders holding existing principal amount have joined the restructuring agreement, and a coordination committee representing 49% of consortium loan principal agreed to a restructuring support agreement with the company. The main terms of the restructuring proposal have been agreed upon.
Bloomberg reported that Country Garden has agreed to some key restructuring terms proposed by a group of bank creditors, potentially paving the way for an overall debt restructuring. However, for the restructuring agreement to be approved, Country Garden needs the support of three-quarters of both sets of debt holders (consortium loan lenders and bondholders).
In its financial report, Country Garden stated that a critical factor for resuming normal operations is the restructuring of overseas debts.
“We are confident that a comprehensive restructuring of overseas debts will be completed by the end of 2025,” the company said, mentioning that a reduction of $11.7 billion in debt could be achieved if the five options in the restructuring plan receive sufficient subscriptions.
Prior to this, John Lam, Head of Real Estate Research for Asia Pacific and Greater China at UBS Investment Bank, predicted that the downturn in the Chinese real estate market would last longer than expected.
He indicated that the sales volume in the Chinese property market has weakened again in the second quarter, and if the situation persists, the rebound will be delayed compared to previous expectations. According to his latest forecast, unless Beijing introduces additional stimulus measures, the recovery of property prices in tier-one cities will be pushed back from early 2026 to the later part of the same year.
John Lam gained fame for lowering the credit rating of China Evergrande Group in 2021, warning about a collapse in the real estate market that occurred 11 months earlier than expected.
Evergrande officially delisted from the Hong Kong Stock Exchange on August 25, 2025, ending its 16-year listing journey. The company’s market value plummeted from over HK$370 billion at its peak to a total market value of HK$2.152 billion before the suspension, with a per-share value of only HK$0.163, resulting in a 99% evaporation of market value.
Since the onset of the financial crisis in 2021, Hong Kong courts have issued winding-up orders against at least six Chinese developers.
The real estate sector once accounted for one-third of China’s economy and was a crucial revenue source for local governments. Despite continuous efforts by the Chinese authorities to revitalize the real estate industry in recent years, there has been little improvement.