[YZF]

Part of that is that the Government relaxed the rules, e.g. allowing students and foreign workers to purchase real-estate without paying the tax. So the markets do work.

The government and their developer pals were counting on the tax not making a huge difference. And when prices started moving down they immediately relaxed it to counteract that. At least that's one way this story can be told.

There were already loopholes where foreigners could avoid the tax through local corporations or have relatives buy for them.