(Reuters) -Chinese property developer Kaisa Group said on Thursday it expects to report a bigger net loss for the first half of the year, hurt by a decline in property deliveries and higher impairment provisions set aside for projects.
China's property sector, a key driver of the economy, has been in turmoil since 2021, with housing sales plummeting 6.5% in 2023 from the previous year and 35.9% from its 2021 peak, following a regulatory crackdown on high leverage among developers that sparked a liquidity crisis.
The slowdown in the property market has led to decreased real-estate project deliveries, which in turn has resulted in lower recognised revenues for developers like Kaisa.
At the same time, many developers are struggling with unsold inventory, delayed projects, and declining property values, implying a need to recognise higher impairment losses on property projects.
Earlier this month, peers including Agile Group, Redsun Properties and Sunac China all flagged bigger or similar losses for the half year.
Kaisa expects a net loss of 8.8 billion yuan to 9.8 billion yuan ($1.23 billion-$1.37 billion) for the half year ended June 30. It had reported a net loss of 6.6 billion yuan for the year-earlier period.
($1 = 7.1344 Chinese yuan)