BEIJING — Worries about Chinese real estate developers’ high debt levels have rattled investors despite signs that property giant China Evergrande may be making progress on resolving its debt problems.

It’s an indication of further pain to come in China’s property market, analysts told CNBC.

Since late summer, global investors have watched for Evergrande’s ability to stave off official default — and are concerned about whether the fallout might spread to the rest of China’s real estate industry.

Other major developers have also reported liquidity problems in the last several days.

Chinese property stocks trading in Hong Kong mostly fell last week. Evergrande was among the least affected and lost about 1.3% for the week.

On the debt front, the Markit iBoxx index for China real estate high yield bonds fell 11.5% last week, according to IHS Markit.

“The market is a bit more worried,” Gary Ng, Asia-Pacific economist at Natixis, said in a phone interview on Thursday. He pointed to how tighter government regulations on debt have restricted liquidity, which has spread to more developers.

“We still think the majority of this stress” will be on companies in the private sector and “on smaller developers and on the high-yield space,” Ng said. “State-owned developers, or the general investment grade [space], those seem quite stable.”

Only five of the twenty largest Chinese real estate developers by assets as of the first half of this year were central government-owned enterprises, according to Natixis.

The three developers that have caught investor attention recently do not fall in that state-owned category.

Evergrande is the industry’s biggest issuer of U.S. dollar-denominated high yield bonds, according to Natixis.

Kaisa Group Holdings, which ranks second among those high yield bond issuers, suspended trading in its Hong Kong-listed shares Friday before the stock market opened. Shares of the developer were already down nearly 13% for the week after news it missed payment on a wealth management product.

Another large Chinese developer, Shimao Group Holdings, traded about 14% lower Friday in Hong Kong. The company disclosed in a filing Thursday that it will only allow institutional investors to buy seven of its Shanghai-traded bonds, effective Friday. Existing retail investors must sell or hold the bonds until maturity, the filing said.

These developments come as investors are already on edge over the risk of default for other Chinese real estate companies.

Moody’s made 32 negative rating actions in the Chinese property sector in roughly the four weeks that ended Oct. 26.

The ratings agency noted in a report in late October that the rated developers will need to pay or refinance tens of billions of dollars’ worth of debt in the coming 12 months: $33.1 billion of onshore bonds listed in mainland China, and $43.8 billion of offshore U.S.-dollar denominated bonds. The figure includes bonds maturing and those subject to put options, or the right for investors to sell.

Central government officials have sought to reassure markets and said in the last few weeks that Evergrande is an isolated case and the real estate industry overall is fine.

Evergrande avoided official default at the 11th hour in late October, and began to announce progress on its construction projects. The property developer said Wednesday it had completed project deliveries involving 57,462 apartment owners from July to October.

However, the pace of deliveries has generally slowed down month-on-month. Deliveries covered 39 projects and 7,568 apartment owners in October, down from 48 projects and 7,808 owners in September, the company said.

Evergrande faced another deadline last Saturday to repay bond investors. The company was the second-largest Chinese developer by sales last year, but fell to fourth this year as of the third quarter, according to industry data site China Index Academy.

“Our view is that currently, the property market is caught in a negative credit loop,” Franco Leung, Hong Kong-based associate managing director at Moody’s Investor Service, told CNBC in a phone interview last week.

Regulators’ call for developers to reduce their debt have made investors and onshore lenders less willing to provide financing, Leung said. Developers — particularly those that are financially weaker — then had to reduce their spending on land or construction costs, resulting in a drop in sales, he added.

As business slows for some developers, investors will choose to put their money elsewhere.

A government policy change or longer-term developer reductions to spending on land and construction can break this “negative loop,” Leung said, adding that it will take time.

Moody’s has no view on whether such a break would even happen. The firm’s outlook on China property is negative for at least three to six months, he said.

S&P Global Ratings forecasts a 10% decline in China’s residential sales next year, and a further 5% to 10% decline in 2023.

“Defaults will rise as down cycle persists under the shadow of sluggish sales, narrower funding channels, and more cautious lenders,” S&P analysts said in an Oct. 27 report.

Not all Chinese real estate developers are in such dire straits.

For the first three quarters of the year, Moody’s noted the top three developers by year-on-year contracted sales growth saw significant gains in sales.

1. Greentown China Holdings, +76%
2. Powerlong Real Estate Holdings, +42.8%
3. Hopson Development Holdings, +35.3%

Powerlong and Hopson had not violated any of the government’s “three red lines” as of the first half of this year, while Greentown had violated one, according to Natixis.

“In the short run, [the regulation means] there will be a liquidity squeeze,” Ng from Natixis said. “In the long run, it will improve the general financial health of the whole property sector because there will be consolidation if we see some of the weaker players … are forced to sell their assets.“

As for the implications for the real estate industry and China’s economy, he said the risk is limited because homebuyers won’t likely want to give up properties or mortgages they’ve already paid for. Since most apartments in China are sold ahead of completion, a major challenge for cash-strapped developers is to finish construction and deliver properties to buyers.

For bondholders, “you feel like your bonds are falling 80%, 90%. But for the homebuyers, the real estate sector itself, we haven’t seen a big change … in terms of this financial risk,” Ng said.