A BMW is hardly a sign of that times are tough. But in China, one Wenzhou property developer offered a free German-made car to would-be buyers to boost sales. China’s property boom and bust is one of the most debated topics in the world. Most observers agree that a slowdown, led by a government determined to stop the market getting out of control, is under way. Yet the stocks and bonds of many of the companies exposed are booming.

Shares of the five biggest Hong Kong-listed, China-domiciled developers by market capitalisation have jumped by an average 70 per cent since the beginning of October – shortly before the BMWs were thrown in. Their bonds, including those of Agile Property and Evergrande, have zoomed from trading at less than three-quarters of face value to nearly par. Agile is poised to sell $500m in new bonds this week at prices similar to those it paid in 2010. And yet China’s property market is clearly weakening. China Vanke, a domestically-listed sector bellwether, this month said contracted sales for the first two months of 2012 were down 27 per cent from last year.

Some of the rally has been of the relief variety. Investors suddenly stampeded for the exits last summer yet the property market did not completely crash. And companies have also been preparing for the worst: many of them used buoyant markets early last year to refinance debt early, easing near-term strains. In the slump that followed the collapse of Lehman Brothers, net debt averaged 4 times earnings before interest, tax, depreciation and amortisation for the Hong Kong-listed groups. Now, that ratio is a far more manageable 2 times.