New rules were also unveiled last week allowing certain companies to issue preferred shares, including companies that use proceeds to acquire rivals.
"As liquidity tightens and developers see more pressure...they may consider M&A via preferred shares," said Macquarie analyst David Ng.
Heightened fears over the outlook for China's property developers were triggered by news this month that home price inflation is cooling and that Zhejiang Xingrun Real Estate Co, based in eastern Zhejiang province, was on the brink of bankruptcy.
China also recorded its first domestic bond default when loss-making Shanghai Chaori Solar Energy Science and Technology Co failed to make an interest payment, raising doubts about the assumption high-yield debt carried a government guarantee.
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The market jitters have slowed the pace of new debt issuance and prompted investors to demand bigger premiums to risk their capital.
As of March 15, Chinese developers had issued 15 U.S. dollar bonds raising $7.1 billion so far this year, compared with 23 issues that raised $8.1 billion in the year-earlier period.
"That said, quite a number of developers have demonstrated the ability to access alternative markets, such as the offshore syndicated loan markets as another means of raising capital," said Swee Ching Lim, Singapore-based credit analyst with Western Asset Management.
Offshore syndicated loans for Chinese developers have reached $1.17 billion so far in 2014, compared with $9.8 billion for all of last year, Thomson Reuters data shows.
Demonstrating the change in investor sentiment, bonds issued by Kaisa Group in January with a yield of 8.58 percent are now yielding 9.5 percent. The company did not immediately respond to a request for comment.
Times Property issued a 5-year bond this month, not callable for 3 years, to yield 12.825 percent. A similar instrument from China Aoyuan Property in January was priced at 11.45 percent. Both Kaisa and Times are in the B-rating "junk" category, which is four notches above a default rating.
Property prices on the whole are still rising, but there are signs of stress in second and third tier cities.
Early indications of property sales in March, traditionally a high season, were not promising, although final figures for the month would not be available until April, said Agnes Wong, property analyst with Nomura in Hong Kong. That may mean developers have to cut prices and investor sentiment may worsen.
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"This is hurting the cash flows of the smaller players," she said.
The market stresses ultimately could lead to the reshaping of the property development sector, said Kenneth Hoi, chief executive of Powerlong Real Estate Holdings, a mid-sized commercial developer.
"In the future, only the top 50 will be able to survive," he said during a briefing on the company's earnings on March 13. "Many small ones will exit from the market."