One of China’s largest real estate firms, Country Garden, is having financial difficulties, which might have repercussions in Australia’s real estate market since its subsidiary, Risland Australia, is building two major housing complexes on the outskirts of Sydney and Melbourne.
The quantity of new homes coming into the market during a severe affordability crisis would be significantly impacted by delays in the projects or a company collapse.
On Friday, bonds and shares issued by Country Garden Holdings Co plummeted after the business missed payments. For the next 30 days, it won’t be regarded late.
The severity of the company’s financial difficulties was apparent late Thursday when it was announced that the first half of this year would likely result in a net loss of 45-55 billion yuan ($11.7 billion).
Wilton Greens is 80 kilometers outside of Sydney’s central business district and is Risland’s principal project in the city of Sydney. Nearly all of the first phase’s homes have been purchased, and work on the first homes has begun.
On Monday, work proceeded as usual at the building site.
According to a business representative, Risland will keep working on the first and second phases.
There will be a “expression of interest campaign” for phases 3 through 6 of the project, the spokesman added, which together amount to around 330 hectares, or 2,380 lots of residential development. This opens the door for Risland to reevaluate its holdings and look for new business prospects in Australia.
All homeowner deposits are being kept in a trust fund, according to the business. Risland has started winding down its activities in Australia.
The business listed the undeveloped section of its Windermere Estate in Mambourin, located 38 kilometers from Melbourne, for $250 million in July.
By the time it was finished in 2030, it was expected to contain 4,700 dwellings and 14,000 inhabitants.
Like many other Chinese firms, Risland has dropped out of Australia’s market during the previous three years. Companies like Poly, Greenland, Yuhu, and Dalian Wanda are among them.
Any delay in a big development like Wilton Greens would have a substantial impact on the NSW government’s prediction that 119,400 to 138,550 new houses would be constructed in greater Sydney over the next five years.
Paul Scully, the minister of planning in New South Wales, has been asked for comment.
In 2018, Country Garden gained notoriety in Australia when claims surfaced that former NSW MP Daryl Maguire had requested payments for help on property transactions from developers. He claimed to be working with many firms, one of which, Country Garden, was looking for land in the Sydney area to build on. Country Garden claims it did not violate any laws by not paying Maguire any fees.
The company is still entirely owned by Country Garden despite changing its name in Australia to Risland.