After months of surging housing sales activity, outsized price increases and lurid tales of speculative excess, the Chinese government has finally blinked.

Incremental tightening by local governments of administrative controls on buying property failed to bring the market under control and the centre has stepped in. Developers are once again being restricted in their access to domestic financing, while the banking regulator has gone public with its warning that lenders must tighten up on risks associated with lending to the real estate sector.

The response has been sudden. FT Confidential Research’s latest monthly survey of 300 developers around the country found a sharp drop in key measures of sales activity and prices, while the outlook has darkened considerably. Our monthly index of sales volumes, for example, plunged to 44.1 in October from 69.6 in September.