That depends on cashflow needs, and just how sure someone is that their spreadsheet (and expected future value) will turn out to be true. For property prices to go up 10% yoy credibly, property has to actually change hands after all, and that requires someone spending cash or financing every year to produce the data. If that stops, then everyone has to adjust their spreadsheets/models, and all the sudden that model gets very grim.

After all, actual cashflow is real/concrete and hence has a momentum and credibility that tends to reduce panic.

Once the money changes hands, it also is ‘permanently’ the owners. Expected market value? Not so much.

At some point, enough people blink that it collapses.

Or maybe not. At least that is what everyone in that situation tells themselves.

But it isn’t panning out for Chinese firms anymore like it used to.

This takes time to actually happen though, as everyone has very strong incentives to keep wil-e-coyote’ing once they’ve run off the edge of the cliff. And they did that many years ago.

And it does work, as long as there are enough ‘greater fools’ around, and there are a lot of greater fools.