It so does not hyper inflate the cost of shelter.

People have a choice to sell their property to who they want. 

If they don't want to sell to a non-resident then that is their choice. Let people sell their property on a basis of what matters to them.

If the government wants to get into micromanagement of the real estate and housing of people let them do it with their assets. They shouldn't be messing around with private assets.

This is just another classic case as make the slaves do what we want to achieve our goals. They have a very free and liberated way of solving housing shortages, by making housing available by providing a product. Stealing someone else's product and restricting free sale is socialist tyranny. 

You know the Chinese buy properties in china and set them aside for later use. It is a custom in China to let properties sit vacant for some time before moving.  It is also a custom to get married to get housing.  Build affordable housing and stop market interference.