Once China's top-selling developer, Evergrande is facing one of the country's largest-ever debt restructurings as it wrestles with more than $US300 billion ($A412 billion) in liabilities, including nearly $US20 billion in offshore debt.

Last month it missed coupon payments on two US dollar bond tranches and is scrambling to sell assets to pay creditors, prioritising repayment to onshore lenders in the last few weeks.

The possible collapse of one of China's biggest borrowers has triggered worries about contagion risks to the property sector in the world's second-largest economy, as its debt-laden peers are hit with rating downgrades on looming defaults.

Chinese property bonds and shares came under heavy selling pressure, a day after Chinese homebuilder Fantasia Holdings' said it had failed to make a $US206 million international market debt payment on time.

That followed downgrading of the company by rating agencies, citing weak recovery prospects for bondholders after default as well as concerns about the company's disclosure and governance practices.

In a statement, the property developer said that it will assess the potential impact of the non-payment on the group's financial conditions.

Developer Sinic Holdings also suffered a ratings downgrades on Tuesday after it announced that certain subsidiaries had missed interest payments on onshore financing arrangements.

S&P Global Ratings lowered its rating on Sinic, saying it had run into a "severe liquidity problem and its debt-servicing ability has almost been depleted".

It said the firm was likely to default on notes totalling $US246 million due on October 18.

Sinic declined to comment on the ratings downgrades.

"Since the Evergrande crisis, investors have become more worried and focused about Chinese developer's repayment ability," said Thomas Kwok, head of equity business at Hong Kong brokerage CHIEF Securities.

The liquidity issues have increased as many developers were not able to issue fresh debt to refinance, and as their ability to raise cash from selling properties fell due to new regulations, he said.

"This will be a vicious cycle for the developers that are not strong enough, because there is not enough liquidity in the market for everyone."

The rating downgrades and possible near-term defaults on offshore debt obligations will pile pressure on Chinese developers to access fresh funding to repay notes worth nearly $US300 billion due over the next two years.

Bond prices collapsed at a handful of the most indebted firms, with Fantasia bonds crumbling below 30 cents on the US dollar while Kaisa Group and Central China Real Estate also registered price falls.

The cost of insuring exposure to China's sovereign debt also came under pressure, and five-year credit default swaps jumped 4 basis points to a 16-month high, IHS Markit data showed.

"The cost of funding has increased massively for all these companies and it is actually a contagion risk," said an emerging markets credit analyst in London, declining to be named.

"If the whole property sector comes under pressure it could become a much bigger issue to resolve, so I think it is better Chinese authorities step in now and try and limit the fall-out."

China is on seven-day holiday from October 1 and regulators there have not made any comment specifically on Evergrande and its woes recently.

The central bank, however, on Wednesday urged financial institutions to cooperate with relevant departments and local governments to maintain the "stable and healthy" development of the property market and safeguard housing consumers' interests.

Renewed investor concerns about the outlook for the debt-laden property sector, which accounts for a quarter of China's gross domestic product, comes as Evergrande shares remained suspended for the second day.

Evergrande requested a halt in the trading of its shares on Monday pending an announcement about a major deal.

Evergrande Property Services Group also requested a halt referring to "a possible general offer" for company shares.

State-backed Global Times said Hopson Development was the buyer of a 51 per cent stake in the property business for more than HK$40 billion ($A7.0 billion), citing unspecified other media reports.

Evergrande declined to comment ahead of an official announcement.

Australian Associated Press