About 70 per cent of Chinese household wealth is estimated to be tied up in real estate. That is high by global standards. In the US, the share is closer to 27 per cent. This disproportionate exposure has raised the stakes for the stability of the housing market.

Between 2003 and 2010, home prices in major cities such as Shanghai, Beijing and Shenzhen rose by more than 150 per cent, marking the beginning of a sustained rise in property values. Shenzhen recorded annual gains of more than a fifth at its peak, turning homes into high yield assets and home ownership into a national obsession.

Then cracks began to emerge. A relentless downturn began in 2020, and real estate developer Evergrande defaulted on its borrowings in 2021. Even so, many market participants assumed the correction would be short lived. Each round of easing mortgage regulations and stimulus announcements fuelled rallies in developer stocks. Retail investors treated each dip as a buying opportunity.