The real estate crisis hit the Chinese mainland last year. Its influence still echoes now. Three major property developers, namely, Evergrande, Sunac, and China Resources Land, have fallen off this year’s Fortune Global 500 list, according to the latest ranking on Wednesday.

Now, only 5 Chinese real estate companies remain on the list. At the same time, the average profit of these 5 property giants has been reduced to $2.8 billion.

This is unexpected, because although these 3 major developers did have a harsh fall last year, they remained high on the list. Specifically, judging from the 2021 list, Evergrande was ranked number 122 in 2021, Sunac China at 364, and China Resources Land at 470.

Evergrande, the second largest Chinese real estate developer, is facing a lot of pressure including  “guaranteeing the handover” and formulating a debt restructuring plan.

From the second half of last year, Evergrande’s debt pressure loomed large, causing suppliers and financial institutions to impose intensive debt collection. 

At the end of last year, Guangdong provincial government summoned Evergrande Chairman Hui after the developer said there was “no guarantee” that it would have enough funds to repay debt.

Evergrande later sets up a risk management committee.

For now, many creditors are still waiting for Evergrande to announce its debt restructuring plan. Last month, the group announced that it would likely take longer to resume orderly operations.

In the first half of this year, Evergrande only achieved contracted sales of  a little over $1.8 billion dollars, and a contracted sales area of ​​12.8 million square feet.

Sunac was China’s third-largest developer by contracted sales at the end of last year.

Sunac has also fallen under big changes due to the sluggish property market. It defaulted on its dollar bonds a month ago.

The challenges facing mainland real estate companies this year are even more severe.

Many homebuyers have decided to go on a mortgage strike, as their houses are not constructed and developers show no sign of finishing the jobs. They are struggling with liquidity issues. The mortgage boycott has spread rapidly to at least 91 cities in China. 

This mortgage strike dealt a heavy blow to mainland home sales. 

According to data released by Chinese real estate data provider CRIC on July 31, sales of China’s top 100 property developers in July fell almost 40% from the same period last year to $77 billion. This is a drop of nearly 30% from the previous month. That ended a two-month recovery in month-to-month sales growth.

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