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Right, wasn't sure if you meant that or something else.

In real estate, people often forget that houses are not forever. They require maintenance, sometimes full refurbishment to bring them up to code, then eventually they become condemned, with extra cost to clear the land, and even the land itself may need utilities renewed. They're long lasting, but ultimately perishable goods (in most cases).

Even in captive audience situations, the calculation is not as simple as comparing mortgage to rent, since rent is the final expense, but mortgage is only a part of it. Depending on how long the housing lasts, how expensive is the upkeep, and what is its final resale value, rent as high or even higher than mortgage, can be the cheaper option.

In some cities with controlled rent, and historical building protection laws, owners have been known to purposefully leave a building unoccupied and in disrepair, just so it would get condemned and they could build a new one in its place. Some cities have struck a deal where owners can tear down the inside of a building, as long as they preserve the facades.

There is definitely a bunch of people speculating, and housing seems to follow a periodic bubble cycle, but then they burst, leaving most of the small and naive investors as bag holders.