A survey of China's 60 real-estate giants has found the debt ratio of nearly one-third soared to a dangerous level, the China Securities Journal reported on Wednesday.

An unnamed source told the paper that regulators recently concluded a survey on those real estate conglomerates and found 18 of them had an average debt-to-asset ratio of more than 70 percent. The 60 conglomerates own 4,266 member enterprises, 64 of which even saw their debt ratio exceed 90 percent, the report said.

According to experts, a reasonable debt ratio for real estate enterprises is between 60 percent and 70 percent, but they could be unable to stand a bubble burst if there was over-speculation on the real estate market, the paper reported.

Regulators have warned banks of a possible increase in defaults on loans to real estate companies, as the property market has entered into an adjustment period, the paper said.

Industry insiders also say that real estate companies may face a credit crunch if they have high leverage and can find no means to replenish capital, as commercial banks have halted new lending amid the government's new measures to curb soaring property prices. And that could cause banks' bad loans to rebound, according to the paper.

The regulators also found multi-end credit cases rose slightly, posing another major risk, the paper said.

Of the 847 member enterprises that got bank loans, 426 were granted credit from two or more banks simultaneously and 90 from five or more banks.

By the end of June, bank loans guaranteed by member enterprises of the same conglomerate totaled 141.7 billion yuan ($21.1 billion), up 22.3 percent from the beginning of the year, raising systematic risks within the real estate industry, the report said. Sources familiar with the matter told the paper that regulators have ordered commercial banks to tighten the management of credit to real estate conglomerates, with total lending to a conglomerate and its member enterprises never exceeding half of the costs of all their projects under construction.

Banks should also put a tight control on related party guarantees and forbid loan guarantees by member enterprises of the same conglomerate, the authorities said.

Some small and medium-sized real estate enterprises may see their capital chain "break" between the fourth quarter of this year and the first quarter of 2011, the source with knowledge of the survey said.

That would speed up the consolidation of the real estate sector and banks should get prepared to minimize the credit risk, the source added.

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