> there is another floor; the cost to build new housing
Mostly irrelevant in an older city so long as there is a large number of older less-desirable houses in the market. And new houses become old houses in 2-3 decades.
Only the people that can afford a new home need to buy a new one.
Building prices do drag up prices, but I don't believe they set a floor unless most everything available is greenfield.
But if you're densifying you're often knocking down those older homes. And so the only way to keep the older homes is to have newer homes being built somewhere - which fights against density.
Mostly irrelevant in an older city so long as there is a large number of older less-desirable houses in the market. And new houses become old houses in 2-3 decades.
Only the people that can afford a new home need to buy a new one.
Building prices do drag up prices, but I don't believe they set a floor unless most everything available is greenfield.