As China’s equity markets cool and its currency is devalued, attention will return to the question of whether its property market is heading for a fall. In my view the boom days are over, but with buyers required to put at least 30 per cent cash down, the risks of a crisis are low.

The housing market is one of the most important parts of the economy, and one of the most misunderstood. Important because residential real estate and construction account directly for more than 10 per cent of gross domestic product. Misunderstood because few observers appear to grasp the structure of the residential property market.

Under the Communist party most workers have been allowed to buy their government housing at a steep discount to market value, with the result that the home ownership rate is among the highest in the world: 89 per cent, compared with about 64 per cent in the US and the UK. But this does not mean the appetite for new homes has been sated. A large share of homes are substandard, so demand for upgrading is significant. Only 55 per cent of the population is urban, a share that will continue to rise, driving demand for housing.