Countries can easily affect the market in this case and there are incentives to do so. Things like zoning laws, property taxes, taxes on investing in property

Countries can easily affect the market in this case and there are incentives to do so. Things like zoning laws, property taxes, taxes on investing in property all affect overall prices, it's never going to be pure supply and demand. For example if a region/country wants to keep prices down, heavily tax second/third/fourth homes. Or provide tax incentives to new builds. Then there's interest rates, one of the reasons that property prices in many countries are increasing is that the interest rates are low, so people looking to invest can't get a good return on their investment in "traditional" locations, so they turn to buying property to rent out.