Primary aim of this research is to shed light on the hitherto neglected issue of speculative bubble in real estate market of Pakistan. The apparent over valuation in real estate market in early 2000s can be characterized as a so-called speculative bubble. This study examines the influence of speculative bubble phenomenon on investors behavior. Moreover it also clarifies the concept of speculative bubble and factors lie behind the speculative bubble. Behavioral finance provides the framework for this thesis. It utilizes knowledge of cognitive psychology and social sciences to explain...