[sfifs]

> Foreign ownership of houses comprises only small % of the housing mark

So a key part of the picture this kind of argument misses out is that price appreciation is primarily an effect of *marginal* demand and supply, not inventory. To put it another way as long as there's even a little bit of demand exceeding supply, prices will go up till sufficient marginal buyers drop out of the market. A very small imbalance is enough to push prices up. To begin appreciating how and why this happens, you may want to analyze a granular item level time series dataset of a market or auction (I once looked deep into a course auction at my alma matter) - it's quite eye opening.

In this case, there's presumably fairly price in-elastic foreign buyers and/or corporate structures like REITs buying into the residential buying market. Note that at any time, the entire market is never at play as most families wouldn't want to sell and move or change their lives - personal risk plays a factor - if we sell now & prices keep rising, how will we afford a house in the future etc. So prices keep rising.

Note that interestingly housing market is asymmetric in the sense that prices don't fall quite as much when marginal supply out-strips demand. Potential sellers who occupy their own houses generally prefer to stay in their homes and simply go out of the market. That's why prices drop in a big way only during major economic crises when people lose jobs, are unable to fund their mortgage and are forced to sell or let the banks foreclose.

In terms of fixes, creating additional supply by easing restrictions will definitely help. An additional way would be to disallow or disincentivize non-resident ownership. Eg. By banning price inelastic absentee overseas owners and investment companies from residential properties, taxing second and third home purchases by individuals with high duties etc but the key thing is to codify regulation at the "intent" level rather than at execution level so parties exploiting loopholes can be prosecuted and enforcing them.