[ABCLAW]

The problem doesn't necessarily blow up immediately. If people's analysis of the EV of a particular deal is positive on the basis of the bubble continuing, some groups will find continued investment is within their risk tolerance and keep going.

However, if interest rates rise, the EV drops, and sentiment may shift which will substantially increase the risk that market appreciation strategy fails.

Eventually the music stops and enough investors stop pumping the asset class, it peaks, and the lack of retail ability to shoulder the debt-load results in collapse in pricing - some major US banks have indicated that mortgage originations are down 90% this year.

Interest rates are only part of a larger calculus. What ultimately blows the problem up is a shift in perception about real estate being a good investment vehicle for large sums of capital.