The Chinese government has been steadily applying measures to cool China’s property markets, ranging from instructing banks to curtail lending to property market participants, to introducing pilot property taxes in several cities, etc. Although headlines can be quite confusing, it appears these measures have started bringing about results and the prices in many cities have either stopped rising or decreased. Deal volume went down, too.

One of the consequences of these policies is that many developers, especially smaller and poorly capitalized ones, came under pressure as they had difficulties getting bank loans. Some tried to issue bonds and other papers, others borrowed from trusts at considerably higher rates.

Many developers lowered prices trying to clear their inventories, creating friction with buyers who purchased their apartments earlier at higher levels. This situation led many potential buyers to postpone their planned purchases in the hope that pr