It has for decades been popular in china to buy properties as investments because of how reliably the prices have been increasing, the government has a limit (3 i think) to stop big monopolies from doing that but it's something most families with enough cash has done, it's also partly why we see so many ghost cities in china and why the country has more housing than people by a solid margin.
What I'm trying to get at is that because so many people have their savings invested in housing, falling prices will in theory shrink their net worth. that's also assuming they could even find a buyer in tough times.
something China also seems to do is over-correcting, issues often start at the local levels and due to their massive bureaucracy they can take a while to make it to the top, this means that when the problems get there they look massive and make the government over-correct and this often ends in new issues appearing. this housing crisis for example is a direct effect of the 2020 crackdown on the huge debt reliance used by the sector in china, however instead of a gradual decrease to more sustainable levels it was too much and now they are paying the price.