Deregulation is inconsequential at this point and real estate values have correlation with foreign exchange rates. Supply in RE alludes to the property you want to purchase or sell. As a result, currency is in demand because of EMH in due to supply/demand. RE is simply one of the assets tied to availability of real loanable funds. Availability of real loanable funds. Fx rate. Cost of goods. The reason real estate prices are declining is because there is a decline in availability of real loanable funds. A decline in loanable funds is a result of foreign exchange rate decrease. The market is responding to an inevitable future FX decline.
Broadly speaking, the RE value theory is very influential with changes in foreign exchange. The market has the same logic where supply and demand make value, in RE and BTC they are quite different. I think that the decline in RE value that you mean doesn't really make sense because investing in real estate is an investment that clients very much ask for, the RE investment portfolio is better in terms of value growth every year.