There are tons of natural limitations in all kinds of things and all sorts of Markets - which is why Free Market Theory is mainly bollocks: the conditions for it to work as advertised exist only in a handful of Markets.

In Housing, clearly Land is the main limiting factor in places like cities and surrounding suburbia, though if that was removed we would eventually run against other limiting factors, probably on some kinds of building materials or manpower, though all that could be overcome with time whilst Land limitations are impossible to overcome until we start living in Space.

Also keep in mind that land usage efficiency can be increased by building more multi-story housing, though in the current situation with land ownership that possibility just gets translated into higher land prices, so in places like the US you end up with sprawl rather than medium density housing: the whole economics of Land and thus housing pricing make a bigger and nicer living place far from a city center be the same price or cheaper than a crummy appartment nearer the center, even though were land was used with higher efficiency and dwelling size is smaller the price per dwelling should actually be cheaper.