CHINESE'S property prices fell for a 10th month in June, underscoring how government relief efforts are failing to curb the country's spiralling real estate crisis.

New home prices in 70 cities, excluding state-subsidised housing, slipped 0.1 per cent from May when they sank 0.17 per cent, National Bureau of Statistics figures showed on Friday (Jul 15).

China's US$2.4 trillion real estate market is showing little signs of recovery. Contagion is spreading to the financial system amid reports that a rapidly growing number of homebuyers are refusing to pay mortgages for incomplete apartments. That's alarmed investors, sinking property bonds and Chinese bank shares.

Authorities held emergency meetings with banks this week to grasp the impact of the mortgage boycott, people familiar with the matter said. Buyers of at least 100 projects in more than 50 cities have stopped payments due to construction delays and concerns about falling prices.

While it's not clear how many homebuyers are snubbing repayments, the delayed projects make up about 1 per cent of China's total mortgage balance, according to Jefferies Financial Group. Should every buyer default, that would lead to a 388 billion yuan (S$80 billion) increase in non-performing loans, it said.

The crisis engulfing Chinese builders is reaching a new phase, with a debt selloff expanding to firms once deemed safe from the cash crunch, including Country Garden Holdings, the largest builder by sales.

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The risk of further Covid lockdowns is also clouding the outlook for a recovery in home sales, which have fallen for 11 straight months, according to official data. That's the longest slump since China created a private property market in the late 1990s.

Chinese authorities have been easing home ownership rules and urging banks to lend more to support the property sector, which accounts for about a quarter of the economy by some estimates. BLOOMBERG