The real estate sector within China is experiencing new concerns as developer Country Garden faces concerns over its defaulting on dollar bond coupon payments that were due on Sunday (6 August).

These notes are maturing in February 2026 and August 2030, respectively, reported Reuters. The two payments, which are to be paid in US dollars, have a grace period of 30 days.

The bond payments are small in value compared to the previous Evergrande case in the country; however, by missing them, Country Garden is staring at facing a default risk, reported the New York Times.

Since late 2021, the country’s real estate sector has been witnessing a host of debt defaults by builders, with China's Evergrande Group being at the core of this crisis.

The sector’s growth remains tepid despite signals of government support, reported Mint.

Country Garden is a leading property developer in China with a large exposure in lower-tier cities, with total liabilities of 1.4tn yuan ($194bn) at the end of last year.

For ensuring its payments to creditors, the company told Reuters that is improving its capital arrangements.

Country Garden saw a decline in its usable cash, indicating ‘periodic liquidity stress’ because of a fall in sales and a deteriorating refinancing landscape, as well as an impact from many fund regulations.

The company told Reuters that it has been 'holding fast, but it's hard to see the dawn light'. It also indicated its efforts to ensure home deliveries and debt repayments.

In the first six months of 2023, Country Garden's sales dropped by 30% to 128.8bn yuan.