Here's a novel idea: stress test banks for a property collapse before it actually happens. Residential prices in China's top-tier cities barely blipped in June, but regulators are reportedly ordering banks to assess the risk of a 60 per cent slump.
Some fretting is justified. Home ownership in China is barely three decades old but the country has already had its share of booms and busts. Newly rich locals – as well as foreigners wriggling through loopholes to punt on renminbi-denominated assets – have rushed to buy in booming coastal cities. New buildings mushroom overnight, but some stay empty; enough to house 200m people, if overexcited local media are to be believed.
Hence the series of stop-go measures designed to keep a lid on speculation, such as higher deposit requirements for second and third homes, the latest of which were introduced in April.