I bet you don't live in Paris or even France.

There is a lock on rent in heated housing markets for example. Not everything in the US is the same on this side of the pond.

If only.

I live in Portugal which has a similar massive house price bubble, especially in the main cities of Lisbon and Porto, and the "investors", foreign or otherwise, seldom buy run down places to renovate, much less actually build anything: there's no need to do it when the market is so tight and the bubble so massive that merelly buying anything and sitting on it (not even rent it) will yield you 14% a year, and way more than that if you AirBnB them (realestate "investors" don't put their houses in the normal rental market when they can make 4x as much from short term lets to turists).

What you describe might've happenned back when prices were just slowly trickling up and there was no "make money fast" scheme of turning habitation spaces into mini-hotels so "investors" had to actually activelly add value to the dwellings they bought in order to extract a better profit, but nowadays thanks to most governments doing all that they can take to pump up house prices - as it makes GDP figures go up plus most top politicians are at the right wealth level to themselves be housing "investors" - simple ownership of such assets yields great returns without lifiting a finger and in touristic places renting them via AirBnB can double or triple that yield with litterally no more investment than having the place painted and adding some IKEA furniture with no need for paying for and spending time in proper renovations.