This was the exact explanation of housing affordability issues in Sydney and Melbourne and apartment supply has been crancked up with building restrictions dropped to address this over the last 5 years. Number of cranes in these two cities has been compared to total number of cranes in all of Nth America. And still all of this supply has again been followed by constant growth in property prices with no dent in addressing affordability issues.
I think you greatly understimate global forces at play when it comes to speculation levels in this asset class in some major metropolitan cities.