Housing doesn't follow the simplistic supply/demand model. What happens in a lot of places here in Europe during the past 10+ years of low interest rates: developers + investors buy land and buildings to develop them, either chopping up older larger apartments into smaller units or building new housing but they don't sell all of them at once after developing. They hold onto units and drip-feed the market to keep prices high, the lost opportunity cost of selling earlier is offset by selling later at the inflated price.

I bring up low interest rates because getting a larger amount for a mortgage is cheaper, buyers will go to banks to check what's the largest mortgage they can get to fit into their budget to then go shopping for a house, so the prices are directly correlated to how much credit you're able to get, pushing prices upwards which the investors/developers can scoop up.

Now prices are extremely high, mortgages aren't so easy to get and we see prices going down (here in Sweden there's been a 10-20% fall), but they are still much, much higher than 10-15 years ago. It's pushed people like me, with a decent salary but no family wealth whatsoever to be basically priced out of the market. I'd need to save about 20-30% of my net salary every month for about 2-3 years to afford just the down payment for a small apartment on the outskirts of the city. I'm not able to do that while my parents depend on me and I still have rent to pay.