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Some China developers likely to default

Declining credit and cooling property market may lead to an industry shakeout

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Dismal picture: Home prices fell in 55 of 70 cities in June from May, the inventory of unsold new homes in 20 large cities jumped to an average equivalent of more than 23 months of sales in June and the floor space of unsold new apartments nationwide as of June 30 surged 25 per cent from a year earlier. - PHOTO: BLOOMBERG

[SHANGHAI] China's slumping property market is fuelling speculation the industry is set for a shakeout as small developers face difficulty raising funds to pay off debt. Yield premiums on Chinese real estate bonds denominated in US dollars have jumped 27 basis points this month to 574 basis