The problem with this logic is that there is literally infinite demand assuming the following premises:

1) Real-estate is a long-term positive return investment

2) The USG will do anything in it's power to keep that premise #1 valid (QE, low/negative interest rates, etc)

3) You can use real-estate equity as part of leverage to buy more real-estate.

4) Foreign investment is allowed, so the system isn't a closed loop

It's a bubble and will keep inflating until it pops.