> How can a declining population selling mostly commoditized goods support ever increasing property prices

It's pretty simple.

If you believed China was going to keep growing at 10% per year indefinitely - then the property prices were a bargain.

I think you needed to be mathematically challenged to believe that, but a lot of people did, or at least thought everyone else just assumed it would happen and they could get in and out before anything bad happened.

You also have to realize it wasn't foreign investment, and the Chinese are astoundingly nationalistic.

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.

Exactly this.

Consequence of capital controls.

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.