The same claim some Americans are making to deny the problem. It does not matter whether bubble concentrated on small regions. What matters is the amount of money that went into speculative investment. The bubble forms on prized real estate located at economically strategic locations, which mostly make up small fraction of geographical area of a country. However, amount of money poured into such an area could be a significant portion of a country's available money.
It is especially bad if leveraged financing is done.
What really matters is the amount of panic that can be generated. It's panic that causes crashes to be worse than reality calls for.