You made a valid point mate. There will be a price point where a house becomes good value vs the rent it can earn, and therefore you would buy it instead of renting it.
There are a couple of other considerations though;
1. Does the property need maintenance or repairs. 2. Does the prospective owner have the ability to borrow the required amount of money from the bank. Some people get trapped paying rent, bills etc and cannot save enough for a deposit, demonstrate repayment ability etc.
Also, in a falling market, people may hold out waiting for prices to decline further before committing to buy. Same thing happens when prices are rising, people jump on board and it becomes a self-fulfilling prophecy.
