REHDA: Rising cost of construction will deter new developments
If the price of land moves up, cost of construction materials move up and the salary of skilled workers move up then the price of the property will have to move up too. What happens if the price is already very high and cannot be moved upwards anymore? The developer may stop building or they buy cheaper land, they reduce the quality of materials or they try to reduce the cost from workers through automation. They could also get approval to build more homes; higher density so that the price is lowered as there are more units within the same piece of land.