Whether China’s real estate market is a bubble that could pop, knocking out Chinese growth and shaking the world’s economy, is a question that is now being asked by everyone from Brazilian iron ore traders to hedge fund managers in the City. In the first of a series on beyondbrics – with a separate series on FT.com – Jamil Anderlini, the FT’s Beijing bureau chief, says that whether it pops or not, the current situation is unsustainable.

It was not until the Chinese government decided to privatise much of the country’s urban residential housing stock in 1998 that most people in China had even considered the possibility of owning their own home.

While official figures now show 89 per cent home ownership in the cities – a figure disputed by many – analysts argue that Chinese real estate constitutes the single most important sector for the health of the entire global economy today.