A lot of it is tied in with local government. The central Chinese government inadequately funds local governments. The local governments close the funding gap b

A lot of it is tied in with local government. The central Chinese government inadequately funds local governments. The local governments close the funding gap by selling/leasing land to developers (often kicking citizens off their land without proper compensation). Chinese citizens buy the properties due to a number of cultural and financial factors. There is not much else to invest in. Savings interest rates are very low. Chinese citizens often distrust the local stock market due to corruption issues and shared memory of previous crashes. Ordinary Chinese citizens are not permitted to invest overseas. Local property is the only reasonable investment to many. Many of these properties are never even lived in. However Chinese citizens are going to stop buying eventually as property prices are already well into greater fool territory. When that happens, local government will be in trouble.