Country Garden is also facing growing liquidity stress. On Wednesday, the developer announced it would sell stocks at a nearly 13% discount to raise HK$2.83 billion ($361 million), compared to its Tuesday's closing price.

Some of the proceeds will be used to repay the company's offshore debt, it added.

"The mortgage boycotts are a double threat to developers and to the housing market," said analysts at Capital Economics in a report on Wednesday.

They have drawn attention to the problem of cash-strapped developers being unable to complete properties that they have already sold, which is "putting off new homebuyers." The boycotts have also made banks more cautious about issuing mortgages, which could dent property sales further, they added.

In a report earlier this week, S&P Global Ratings estimated China's property sales could drop by a third this year because of mortgage strikes, as people believe developers won't be able to complete presold units in time— the most common way they sell homes in the country.

"Without sales, many more developers will collapse, which is both a financial and an economic threat," said Capital Economics analysts.