For as long as wealthy people and funds keep buying all the houses and rent them out, you are never going to solve the problem. Never, ever.
Do you want houses to keep going up more than inflation?
If no, then they can't be a "good investment".
The crazy thing here is people complain about their economy slumping. Imagine what would happen if we didn't have all this money going into houses... the money won't disappear. It will go somewhere in search of "good investment".
Looking at my own country, I cannot really pinpoint any single corporation I would trust to grow a lot in the 20s. Peeerhaps Avast, maybe.
And looking at the recent Chinese governmental heavy-handed social engineering and crackdowns, I expect rich Chinese to start investing their money outside China even more furiously than until today.
If you’re using leverage and the cost of that leverage is lower than the cost of inflation (The case with US mortgage rates) you will come out ahead even if the property only keeps pace with inflation. Even if the interest rate on your debt is the same as inflation, mortgage payments are calculated using simple interest while inflation is compounding. That’s not even getting into taxes which can shift the calculus further in your favor.
Unfortunately, this can all be very non intuitive but RE is one of the best investments out there. You can’t get margin called, the government is heavily subsidizing the loans and there are endless protections (Can’t lose your primary residence in a bankruptcy, mortgage forbearance, etc ) you’d have to be crazy to rent if you have the option not to.
This seems to be in conflict with the common market principles. EU countries cannot economically discriminate against EU citizens, with only a few exceptions aimed at reduction of welfare tourism.
Or does Denmark have an opt-out?
And what about real property owned by legal entities? Czechia used to have a ban on real property ownership by foreigners before EU accession, but foreign investors would just create a local LLC and buy/build whatever they wanted.
It seems that you're saying the restriction is tied to residency and not citizenship, which implies that non-citizens can purchase property as they don't rent it out (even if they don't actually live in it?).
This may not prevent the problems that come from some foreign property investment that is driven by seeking to protect wealth from government seizure rather than to produce passive income.
What about corporations? Can they, for example, purchase property in order to give employees rent-free housing?