When I've seen these discussions before the two big factors cited are:

* Real estate investors can borrow against the long term income of their properties, and often value that above the short term rents. They also tend to be highly leveraged to build the next project. This creates situations where high vacancies and poor returns are worthwhile because they can pretend they'll fill the building at their price eventually, and therefore borrow against the building as though it would return that price X all their units X however many years.

* A lot of people seem to think (I haven't dug into the true scale of this) that enormous amounts of money from China is being parked in Western real estate as some sort of protection against seizure by the government.