While the government can't 100% control hosing prices, there are some things that they could be doing to improve the situation:
1. Make it law that for every luxury apartment that is built, contractors must also build an affordable aprtment (this legislation exists in some countries).
2. The govt can build new apartments and earmark them specifically for public housing for young couples (this has been started here, to some extent).
3. Limit the phenomenon of people abroad buying up all the housing, for example, in Jerusalem, and thus hiking up the prices. This can be done by imposing more taxes on foreign buyers.