Property prices do not really realte to the true value of properties. Theoretically they should be the sum of the cost of the land and th building cost. Unfortunately, they have been driven significantly higher by lack of supply and high demand and the willingness of financial intitutions to lend increasingly larger amounts of money to purchasers. We have seen recently that the ability of the borrowere to repay the loan has not always been a factor taken into consideration.
Of course, it suits lots of people for prices to remain high. Estate agents are paid a percentage commission on the sale. The Government gets stamp duty based on the purchase price.