Headwinds hit property sector INVESTORS in the listed property sector are bracing for another round of earnings write-downs this week due to the parlous state of the residential development market. Stockland's new chief executive, Mark Steinert, is expected to sweep the decks clear on Wednesday with a potential cut of up to $200 million in the value of projects, from land banks in Queensland and possibly Victoria. The die was cast last week when Mirvac's new chief executive, Susan Lloyd-Hurwitz, slashed the book value of the company's housing and land-bank developments in Perth and Queensland by $273.2 million. The trigger was a combination of falling house and apartment prices, and consequently sales volumes, not helped by the past two years of poor weather, particularly in the coastal areas of the Sunshine and Gold Coasts and western parts of Brisbane. Property analysts at JPMorgan said they expected Stockland would make impairments as it was exposed to the Queensland market to a similar extent as Mirvac. "We have stated $100 million to $200 million as a likely Stockland impairment (but this is really just a guess as disclosure from residential developers make this very hard to estimate)," the analysts said. If anything, following the Mirvac announcement, the risk is that the Stockland impairment will be a bit higher than we are expecting. Stockland warned two months ago that earnings would not improve until next financial year. Stockland's chief executive residential, Mark Hunter, said at the time that market uncertainty and a lack of consumer confidence were continuing to present challenging market conditions, particularly in the Victorian residential market. The head of real estate research at Bank of America Merrill Lynch, Simon Garing, said Stockland faced similar risks to its residential business as Mirvac had confessed to last week. "Overall, we think it is quite possible that Stockland will see some further impairments," he said. Under previous chief executive Matthew Quinn, Stockland issued at least four downgrades over 18 months in earnings from its residential development business. The cuts were attributed to poor weather, pricing pressures and buyers not being enticed by falling interest rates. To alleviate some of the pain, Stockland took an initiative to build smaller homes in its new projects. Mirvac will report its half-year earnings on Thursday.