Sometimes the most obvious trades are the best. An investor buying the Hang Seng Property Index at the beginning of this year, reasoning that prices would be buoyed by strong Chinese demand and ultra-low interest rates imported through the US dollar peg, would be sitting on a 17 per cent gain. If that same investor then sold Shanghai property stocks, on the understanding that Beijing would intensify measures to keep prices in check, he or she would have dodged a 25 per cent fall, nearly three times worse than the benchmark.

Mainland property markets are no longer buzzing. The rate of year-on-year price increases for new urban residential builds has been falling since April, when it hit 15.4 per cent. In October, Beijing rents fell for the first time in 18 months. Newspaper editorials issue regular reminders that if increases in interest rates and banks’ reserve requirements fail to dampen spirits, economic planners have some heavier-duty weapons – such as a property tax – in reserve. They have been generally successful in curbing exuberance. Since August 2005, when the official sale-price data series for 70 cities began, the average yearly rise has been 7 per cent, well inside the roughly 12 per cent annual increase in urban disposable incomes.

Still, the likelihood of softening mainland markets increases the appeal of buying in Hong Kong, where regulators’ tightening efforts – such as withdrawing the entitlement to Hong Kong citizenship to foreign property buyers – have had little discernible effect. A 5 per cent fall in the broader Shanghai market on Friday, apparently prompted by fears of an acceleration in interest-rate rises, was not matched over the border, where property stocks accounted for four of the top nine risers. The obvious trade is still paying off