The strange thing is, people are obviously still buying these houses at those prices, otherwise the price would go down. But here let me compare with you:

The average price here in Shanghai for an apartment is about 35-40x the average median income, compared to places like London where it's about 10x. Shenzhen down south is even worse, pretty much the least affordable place on the planet, and yet, people still buy it.

Culturally, entire families, aunts, uncles, grandparents, pool their money together to get a mortgage for a place, this is often the only way to get a property.

To make matters worse, the NORM here is to buy a property before they even start building it. You literally own a mortgage to a square of dirt. Those responsible for building them often instead use that money to get more land to sell more un-built property to more people, and then use a fraction of the cost to build the cheapest, tackiest, brittle apartment buildings you've ever seen, affectionally known as 'Tofu-dreg construction'.

This isn't a scam, it's literally how things are done here. Madness.