This isn't really true in housing. Housing is not a market commodity, it's not priced primarily via supply or demand. Housing is priced based on comparables, quite literally, what is the most expensive thing that sold recently, and how close do we compare to that.
In this way, building a fancy new condo building will literally raise prices, even if the number of people remain constant, and even if it "increases the number of the units in the area", because now pricing comparables will get to take the new condo's higher pricing into effect, and things like comparables and federal interest rates have a much higher effect on sales price than traditional supply or demand.
To be clear, this is NOT an anti-build argument, we need more housing, the only way to get more is to build it. We just need to be mindful of the real-world consequences of it, new luxury condo construction creates a form of financial "pollution" into that area, and all nearby housing stock will absorb that pollution in higher prices.
This is something anyone who cares about affordable housing needs to understand, and plan for.