China’s property developers have a habit of countering bad news with good. Bears expect a slowdown, given high net debt and government plans to rein in excessive borrowing. But core profits at big developers grew about 50 per cent on average in the most recent earnings reporting season. The sector cannot defy the bears for ever.

The business has already become tougher in two respects. First, the government has restricted land supply in an effort to forestall price drops, so it is harder for developers to increase land banks. Recent mergers in the sector have achieved this at lower cost than auctions.

Second, regulators are expected to limit residential property sales volumes by restricting consumers’ access to credit. As a result, Moody’s thinks sales growth will slow in the second half this year, after an 18 per cent jump in the first half.