It seemed to me to be at least in part due to the bizarre contractual setup where even after a vendor had accepted an offer, they could still pull out and sell to a higher bidder. This led to purchasers paying over the top, just in order to try and prevent someone else "gazumping" them.
Of course we bought at the top of that cycle, and a year later our house was worth only 70% of what we paid for it. 2 of the 4 owners in our little row handed their keys to the bank and abandoned their properties as they were well under water with mortgages of significantly more than their property values.
That scarred me for life and I told plenty of people along the way that prices can go down as well as up.
Though with the benefit of hindsight, that's rare and houses are usually ... as safe as houses.