Similar problems here in Croatia, few reasons for it:
- Boom of AirBNB's and apartment rentals with tourism, with real low tax rates
- Limited liability abuse - company opens up, sells 30 apartments in a new building, build out the building, don't get any permits, just close the company down and open a new one. Legally, they are untouchable, and getting the permits is now on the apartment owners. Multiple friends live in such buildings, and maintenance is a PITA, trying to legalize it is a PITA, getting water/power is a matter of making shady deals with the neighbours, basically even living in it is technically illegal but not much they can do.
- Large influx of illegal money into the housing market (we have no law to investigate source of income), so money could be laundered easily.
- "Legalization procedures" where if you built a house before a certain year, or just started construction, it could be legalised. This caused people to build "fake roofs" and then claim it as a real building later on.
- Recently, immigration joined too - workers from non-EU countries are now allowed to get work visa's, and a lot of landlords are renting out a small 50m2 apartment to 10 people at the same time for ridiculous prices. The poor workers have to share bedroom with 10 other people, which is a terrible living condition, causing accidents like a whole floor collapsing due to 50+ people living in the building. While it's not legal, inspections are rare and the grey market is thriving.
- And my favorite - as a large number of apartments are bought as investments and uninhabited - around 22% in the capital, according to official estimates, with about 500k free total, in a country of 3.5 million people - the government got a great idea:
They will free up more housing, by offering the landlords of the empty apartments to rent thenm out with government guarantees. This means the government will pay them out 60% of the future rent money immediately, so the landlord can buy another apartment as an investment immediately using that money, and just get richer.
Now, we're in an interesting situation:
- Prices have risen quite a lot, like 3x over the last 5-6 years
- Existing landlords will get funding from the government to buy more apartments
- Meanwhile, new loan rules came out, prevent people from getting a loan that is more than 45% of their salary (after subtracting the costs, including your current RENT). 10% of the value has to be provided immediately by the buyer, and after loan payment and living expenses, you need to have at least 900 euros remaining each month from your salary.
In a country with a median salary of 1300 euros, with median rent being about 500-700 euros, this puts a lot of people in a locked position - you can't get a loan to buy, because you are renting. So from the 1300 euros of your salary, the bank subtracts 500 euros of rent as your "living expense", leaving you with 800 euros monthly total, which is under the legal limit for getting a loan, even tho once you buy the apartment you would not pay rent anymore.
So to get a 30 year loan to buy a 50m2 apartment, you need to have about double the median salary.
Now, they are talking about property taxes, which will force people barely making ends meet to sell the inherited land/houses/apartments for cheap to people that can afford it.