"Speculators and investors may be the ones driving up the prices, but I think there really is just that much demand. " Only 5% of buyers need to be speculative

"Speculators and investors may be the ones driving up the prices, but I think there really is just that much demand. " Only 5% of buyers need to be speculative. They drive the 'price anchoring' for the rest - including the banks who 'deem the property to have x value'. That's how bubbles work - a small number of 'price insensitive buyers' create poorly anchored prices which drive everyone else into the mania. Those 'buyers' are there only because the banks are happy to give them loans using the asset as backing. You don't need to be bothered by it as long as you are willing to sit on it for 10+ years and can afford to make the payments.