Land-use rights for three plots in Beijing were auctioned off for record prices within two days at the end of the National People's Congress (NPC) annual session, which ironically had decided to rein in the skyrocketing housing prices. The successful bidders, as in many cases, were State-owned enterprises (SOEs).

No doubt, China's property market is overheated. But is there a bubble in the real estate sector?

It is necessary to ask this question because we don't know what exactly is meant by a "housing bubble". Often, we tend to consider housing prices as high if they rise beyond the reach of "ordinary people". In this sense, there indeed is a big bubble in the housing market. But housing prices have risen - especially last year - despite low affordability.