State-backed property developer China Vanke, once the country’s largest homebuilder by sales, narrowly avoided default on a 2 billion yuan ($284 million) onshore bond last week, underscoring the continued strain on China’s property sector as its recovery remains slow and fragile.

The developer also sought to postpone repayment of another 3.7 billion yuan ($530 million) of domestic debt due on Dec. 28, according to people familiar with the matter, with bondholders agreeing to extend the deadline to February.

The moves highlight the ongoing liquidity pressures facing Chinese property firms years after the housing downturn began, despite repeated government efforts to stabilise the sector through policy easing, financing support and measures to boost homebuyer confidence.

Investment in property development has remained weak, while home prices in many cities continue to fall or stagnate, dampening demand and weighing on sentiment among buyers, lenders and investors.

The prolonged slump has broader economic implications. The property sector, once a key engine of growth, is deeply intertwined with local government finances, household wealth and construction activity. As prices decline, millions of homeowners are left holding assets worth less than they paid for them, curbing consumption and reinforcing a cycle of caution.

Beijing has rolled out a series of measures aimed at reviving the sector, including lowering mortgage rates, easing purchase restrictions in some cities and encouraging banks to support developers deemed systemically important. However, analysts say these steps have yet to produce a decisive turnaround in sales or investment.

China Vanke, which has close ties to state-owned shareholders and is viewed as one of the more financially resilient developers, has been seen by markets as a bellwether for the health of the sector.

Its need to delay repayments and narrowly avoid default underscores how deep and persistent the downturn remains, even for the industry’s stronger players.