My parents happened to buy their house in an area that wasnt super desirable and continued to not be super desirable. If they had just invested their down payment in the S&P it would be worth twice what the house is. But as it is, investors seem convinced real estate is a great investment because governments refuse to let people build so prices continue to skyrocket.
In Japan the value of a building reaches $0 after 30 years because they rebuild everything. A building is an inherently depreciating asset, yet my tenement in Boston build in the 1880's continues to go up in value because they cant build shit.
You cannot force people to think that the value of a building is zero just because you want it to be. We have seen new homes further out command very high prices here in the US because of culture and there are a lot that desire the fit and finish of a new home but for the most part the old homes are still desirable and livable. Eventually old homes are rebuilt or remodeled and if they sell at the lowest point (like after a fire) will be sold for land value.
You could probably house 10 times as much people on the same land if you bought 6 storey apartment blocks.
Land is finite, but upzoning it still reduces the cost of a square meter of floor space.
I agree with you that the value of real estate is : building + land.
While the building deprecates, the value of the land is going up. But this can at least be dampened by upzoning and by taxing land value.
Citation needed.
(There is a problem with Prop 13 in California, where old people stay in houses that are way to big for them, removing supply from the marktet. But that's not the "empty apartments" you're referring to)
Others take different approaches. Some are of the view that a unit is not empty so long as it is listed as someone's "primary residence", irrespective of whether they actually sleep there.
That approach will surely encourage the hoarders and wreckers to build more housing.