As housing stock quality improves, everyone upgrades. Which leaves room at the bottom level to get on the ladder into lower quality cheaper housing.

Also supply and demand: if prices are increasing it is mostly because supply is not keeping up with demand.

Lastly, like all other products in a market, we should see a general improvement in quality, this isn't a bad thing (think how cars how 10x more reliable, comfortable and fuel efficient than they used to be).