[nradov]

It was more like there was no alternative. Capital controls prevent regular Chinese investors (those without special Party connections) from taking their money out of the country. The domestic stock market is a joke. Banks pay low interest rates. So, the only thing they can do with their money is speculate in residential real estate.

[onlyrealcuzzo]

The stock market in China is likely to look better than the property market when it implodes on leverage, and definitely bonds and savings.

People didn't want to miss out. That's it.

You're not going to buy a house on 3:1 leverage if you think it's overpriced by 30% just because you think the stock market is overpriced by 50%. You'd just keep your cash in savings.

The problem is - they believed it would keep going up - because it had been for almost everyone's entire adult life.

[urthor]

Exactly this.

Consequence of capital controls.