Zero sum game. Rampant inequality. Crashing social mobility.
As you say it's not merit based. How many people can save 500k in 10 years? Leveraged mortgage debt then becomes the only game in town. Game set and match the banks.
It comes from two places (at least):
1. Debt - someone pushes a few buttons on a computer keyboard and "poof", you've conjured a million dollars out of thin air
2. China - this is real money, but if it gets pointed at one geographical region, it can cause major distortions, especially if that real money can be confiscated at the whim of the politician who happens to be in power at the moment
Yes there is foreign money but still most buying is domestic. Foreign money is a convenient bogey man. It's the same in Canada and the stats do not bear it out.
Actually, no one knows, because stats are (deliberately imo) not kept.
http://www.greaterfool.ca/2015/05/14/the-tipping-point-2/
Vancouver not even in the top 10 yet we are told endlessly HAM is the cause.
The investment works because in 10 years time you own bigger chunk of the asset (Mostly due to inflation but also debt repayment from rent).