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When it comes to real estate the 3 most important things are location, location, location. Most city centers do not have options to allow more housing as they are fully built.

The improved materials already reduce the house building costs compared to 10-20 years ago but this mostly applies for rural areas....

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This really shouldn't be downvoted because it's completely right. Improved materials can have the opposite effect as well. There are other factors besides location but that's the primary issue. Now, two houses in the same neighborhood, comparable view, etc could vary in price because one is new, more modern, more energy efficient etc.

So what about increasing supply by building more?

most of the highly desirable areas are either fully built or land costs a fortune.

this is exactly the problem for housing prices: supply can't increase while more and more people want to live there(world population keeps growing and migration is at peak levels)

opposed to that there are countries, cities or neighbourhoods where you can buy property cheaper than the price of building it

For example: a lot of Detroit, Michigan.

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