Why are shabby, tiny, 3 bedroom homes in a run-down, graffiti-ridden neighbourhood advertised for upwards of 6-800K (at least in the Sydney area) when I would not pay over 80K? Because enough fools* have paid it, now everyone thinks thats what their worth!
Same thing happened to classic cars when the Yuppies got their mitts on them as "investments"... back in the 80's, I owned an e-type jag as well as a '59 MGA, paid very little for them and didn't get much back. I just had them because I love them. Then someone got the bright idea of adding an extra 0 to the price on the principle that it will appear more desirable if its unaffordable.... and enough people took that bait I guess and here we are all this time later and I'll never be able to own the like again...
* naughty word removed by Mod.