Can't be cheaper than the materials and labor costs to build it. If house prices get too cheap house builders / contractors will stop building. This will pinch supply and keep house prices high enough that only cash rich (corps and banks) can afford them. Most people will have no choice but to rent indefinitely. Those who manage to save up some $400k may finally afford to buy a house just in time for retirement.

But if house prices (and therefore rents) go down, people will need lower salaries for an equally comfortable life, pushing labour costs down, making housing cheaper. Man economics is easy

Why would rent go down if a substantial part of the market is owned by a monolith (banks/institutional investors) who can impose price control? This is already slowly happening.

https://www.cnbc.com/2023/02/21/how-wall-street-bought-singl...

No, but there would be a lot more renters.

Or, and this seems far more likely, it would be owned by a very small group of people or corporations or the government.

Someone will always have money.

The system we have now may not be perfect but it a far far more egalitarian than the past when there were no loans

Canada would like a word.