For 31-year old Beijing resident Wang Yuanzhi, talk about a bubble in Chinese property is not something to be too concerned about.
"If you look at the real estate market in China, it has already seen a golden decade of extreme fast growth. There will still be room for growth in this market, even in the next 10 to 20 years," said Wang, who bought a home under construction last December. "The whole housing bubble is a fear; it is a concentration on the risks that the real estate market faces."
Underlying confidence expressed by residents such as Wang may be what China's authorities hope will aid a recovery in a market that has seen prices fall for three straight months.
For other observers a downturn in China's once red-hot property market poses one of the greatest threats to the economy, the world's second biggest.
"The risks and exposure to property don't look the same as in the U.S. subprime [mortgage crisis], but new bubbles never look exactly like the last bubble (otherwise they'd be easy to recognize)," said Patrick Chovanec, chief strategist at Silvercrest Asset Management.
"The exposure of China's banks (and now shadow banks) to real estate may look different than it did in the U.S., but it's very real. The main exposure is the reliance on property as collateral to support virtually all forms of lending throughout the economy, a situation that is very similar to Japan in the 1980s," he added, referring to a collapse in Japan's property market after a boom.
The importance of China's property market cannot be underestimated—it accounts for roughly 15 percent of gross domestic product and directly affects other sectors such as banking and construction.
To contain a boom in China's housing market and keep prices affordable, Beijing imposed restrictions over the past five years. Those measures together with a slowing economy now appear to be having an impact.
Average new home prices in 70 major Chinese cities fell 0.9 percent in July on month, following a 0.5 percent decline in June, and the question now is just how protracted the slowdown will be.
"The real estate market has been the downfall of many major economies in the past—the U.S., Japan," said Dariusz Kowalczyk, a senior economist at Credit Agricole. "So the worst case scenario for China's housing market is an economic crisis."
In China's case, credit expansion drives the housing market and when that slows it has a direct impact on real estate, say economists.
They point out that since 2008, China's money supply expanded by more than threefold and a lot of that money had gone into real estate. Latest data shows that the amount of money flowing into China's economy slowed to its lowest level in six years in July.