China property firms' shares fall on default reports

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Shares in various Chinese property firms have fallen after media reports that Chinese developer Zhejiang Xingrun Real Estate cannot repay close to $400m of outstanding loans.

Shanghai-listed Poly Real Estate Group saw its shares slump by 3%, while shares in Shenzhen-listed China Vanke fell nearly 2%.

Zhenjiang Xingrun is based in Fenghua, a city in eastern China.

In March, Chaori Solar became the first Chinese firm to default on its bonds.

The default two weeks ago by Chaori, a solar components maker, led to fears that it could be the start of a wave of domestic bond defaults by Chinese firms.

Property developers in China have been a particular source of concern, as many have increased their debt loads in recent years to buy land and build.

At the time, prices for homes had been rising, but now the market appears to be cooling down.

According to data issued by the National Bureau of Statistics - a Chinese government agency - the average price of a new home in 70 Chinese cities increased at a slower pace than in recent months.

Prices in Beijing and Shenzhen each rose 0.2%, which was the slowest pace since October 2012.

Cities in China have sought to combat rising prices amid fears of a bubble, and banks have increasingly tightened lending to real estate firms.