Is it a bubble if it does not burst? China’s housing prices sometimes appear unstoppable. A Beijing home costs the average household up to 50 years of income, double what it was 15 years ago. Prices in May were up 11 per cent, continuing gains for 49 straight months.

The Chinese government is torn between controlling prices and preventing a crash. So far, it has been unable to rein in prices. Limits on lending and sales bans have been offset by recent credit easing. Its push to control prices by encouraging renting, instead of buying, was met with little enthusiasm. Large developers stand to gain the most from this tug of war. 

Many debt-laden Chinese property developers look to be in bad shape. Eighteen of them have issued $3bn worth of US dollar bonds this month at up to double the cost of borrowing at home. And while prices rose in May, property sales by floor area, an important indicator of demand, dropped 5.5 per cent.