(Reuters) – Chinese property developer Kaisa Group said on Thursday it expects to report a wider net loss for the first half of the year, due to a drop in property deliveries and higher provisions for impairments on projects.
China’s real estate sector, a key driver of the economy, has been in turmoil since 2021. Home sales fell 6.5% year-on-year in 2023 and 35.9% from their peak in 2021, amid tighter regulations against developers’ over-indebtedness, leading to a liquidity crisis.
The slowdown in the real estate market has led to a decline in real estate project deliveries, which in turn results in lower recognized revenues for developers like Kaisa.
At the same time, many developers are struggling with unsold inventory, delayed projects and declining property values, forcing them to recognize higher write-downs on real estate projects.
Earlier this month, peers including Agile Group, Redsun Properties and Sunac China all reported wider 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. The company reported a net loss of 6.6 billion yuan for the same period a year earlier.
($1 = 7.1344 Chinese yuan)
(Reporting by Roushni Nair in Bengaluru; Editing by Shilpi Majumdar and Subhranshu Sahu)
