China’s housing market is showing signs of recovery after a two-year downturn, helping to counter a slowdown in the broader economy. But the government is weighing between that momentum and the risk of a build-up in debt. Show you what factors investors are making their decisions on.

China's property prices and sales have risen in recent months, driven by looser lending policies, and moderate growth in new construction.

That's easing the burden on China's high housing inventory, which can fill seven Manhattan islands.

The average land auction price for China's second-tier cities surged 65 percent in April from March. That easily beat the 2 percent gain in the country's major metropolises.

"I think for housing developers, they are encouraged by a reviving market to unfreeze more funds for land leases," said Chen Yunfeng, Sec.- Gen.of Nat'l Real Estate Manager Alliance.

Housing sales rose 61.4% to 2.41 trillion yuan, or 369 billion US dollars, from January to April from a year ago.

Property investment in the first four months of this year have risen 7.2%. Construction starts gained more than a fifth.

Many investors are shifting money from weak stock markets to real estate. But talk of property speculation is also increasing.

"Overall, we do see a hint of irrational buying in the property market right now. It's hard to say the current market rebound is healthy," said Zhang Dawei, chief analyst of Centaline Property.

Here's the dilemma. Economists say the government wants to boost the property sector enough to hit its 6.5%-plus growth target for 2016 without making its overcapacity and debt problems much worse.

The economists say the housing market’s contribution to the Chinese economy has been falling in recent years from more than 20 percent to just 15 percent in 2015.

"A stable housing market bodes well for everybody and the economy. It's abnormal for the market to fall, or grow too fast which blows the bubble up," said Chen Yunfeng.

The upside is that the property increase is spreading beyond the top-tier cities of Beijing, Shanghai, Shenzhen and Guangzhou.

Analysts say the phenomenon reflects confidence that the government will continue to reduce the inventory of unsold properties by lowering down-payment requirements and cutting interest rates.

It is still the top priority for many developers to clear their inventory this year.