Aren’t the Chinese right here? Their property market is operating under capitalism, and if you bail out capitalists it does create a moral hazard for them to keep re-creating the conditions for more bail-outs. It would also send the signal that capital is actually in charge, and not the CPC.

My understanding is that the CPC wants to use this opportunity to increase the share of social housing, but as you said is attempting a controlled demolition of the market; trying to thread the needle between saving “regular” people who invested in real-estate and allowing the whole thing to collapse. It seems like a daunting task, but China might be the only country that could pull it off. Plus there’s the added benefit of greatly reducing the power of any real-estate ghouls left in government after the anti-corruption campaigns.