[immibis]

You're conflating different values of "you". If I sell my house to a non-resident person and receive money, why should I use that money to build more housing, rather than a Ferrari? Meanwhile, the people who actually build the houses aren't the ones selling all the existing stock in the most desirable locations. They are stuck building suburban sprawl because that's where the empty space is.

[closedloop129]

'You' was meant in a general way. Somebody sells a house, the money exchanges hands several times, and then somebody else can build a new house - unless the money ends up in Maranello.

The desirable locations are a renewable resource. Portugal could build new desirable areas. They could even turn this into a recurring business and sell them to international investors, too. Instead of building suburban sprawl they can build more urban clusters.