(Bloomberg) -- Country Garden Holdings Co. posted its biggest sales drop in at least six years as customers’ concerns about its ability to complete projects threaten to exacerbate a cash crunch at the defaulted Chinese developer.

Contracted sales for October plunged 81.1% from the same period a year earlier, topping an 80.7% drop in September, its corporate filings show. Sales edged up 2.2% from the prior month. 

Country Garden, with property developments in almost every province in China, has seen transactions slump since warning in August of “major uncertainties” about the redemption of its bonds. Sales are hovering around a sixth of their average monthly level in 2021 and 2022, underscoring customers’ reluctance to buy. 

The developer’s default on a dollar bond in late October “threatens to repel homebuyers and hasten the free fall in its new-home transactions,” Bloomberg Intelligence property analyst Kristy Hung wrote in a report this month. 

Speculation over Country Garden’s fate flared anew this week after Reuters reported that China’s State Council instructed the government of Guangdong province to ask Ping An Insurance (Group) Co. to take a controlling stake in the developer. Ping An said it doesn’t hold any shares in Country Garden and has no plans to acquire it. 

The developer was the country’s largest builder by contracted sales for several years before plunging to seventh spot in 2023. With more 3,000 housing projects underway, Country Garden has the potential for an even greater impact on the housing market than China Evergrande Group’s debt failure in 2021.

In a positive sign, Country Garden said it has delivered about 460,000 homes in the first 10 months. In July, it set a full-year target of about 700,000 units.

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