China's dramatic stock market collapse appears to be spilling over into the country's real estate market, where investors are rushing to sell their homes or abandoning plans to buy a new property as they nurse hefty losses on equities, local media reports.

Several Shanghai-based real estate agents told the China Daily that more apartments and villas had appeared on the market as investors tried to recoup their losses by selling their properties.



Cui Aijun, a real estate agent at Shanghai Junda Property Services said that four of his clients were urgently selling their homes after getting burnt in the stock market, the government-run newspaper reported on Friday.

While stability appears to have returned to China's turbulent equity market in recent days, stocks have been on a wild ride. The Shanghai Composite has tumbled 25 percent in the past month, while the Shenzhen Composite has suffered even steeper losses, down bymore than 30 percent over the same period.



"Some investors sold their stocks to buy properties in March and April. But now we see people selling properties after piling up losses in the stock market," Cui told China Daily.

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Those looking for a quick sale typically offer their properties at a price that is 10 percent below the market average, the report said, citing a villa in Shanghai's upscale Pudong New Area, which is on the market for 17 million yuan ($2.74 million), a steep discount to the other homes in the neighborhood, which are asking for 19 million yuan .



These developments come just as China's property market recovery begins to take hold. Average home prices rose 0.56 percent in June from a month earlier, according to the China Index Academy's survey of 100 cities, up from a 0.45 percent gain in May and the fastest growth since January 2014.



The government stepped up support for the real estate sector in late March, unveiling measures aimed at encouraging home buyers into the market, including lowering minimum down payments for buyers of second homes and cutting to two years the length of time a seller must own home before selling in order to avoid paying a business tax.



David Cui, head of China equity strategy at Bank of America-Merrill Lynch, believes the stock rout could have a prolonged impact on the real estate market.



A big unknown is how much stock investors have borrowed from banks using property as collateral, he said. On July 5, China's securities regulator announced that property had become an acceptable form of collateral for margin traders.

