I want to believe this, but my personal experience shows the opposite. I live in Berlin, and there's a severe housing shortage, even though Berlin is very big geographically, and 5 story buildings are the norm, many even as mixed-use.
Why is this? Because there's a strong inflow from all over the world and not enough building. Meanwhile prices are going up without regard to incomes, and it is incredibly hard to get even a viewing, let alone be offered an apartment. On top of that, most of the stock is old and not modernized at all.
Even for private owners, it is better to not build and let scarcity drive the price of their investments higher, than to take the risk of building and potentially see rents or prices fall.
Why is this? Because there's a strong inflow from all over the world and not enough building. Meanwhile prices are going up without regard to incomes, and it is incredibly hard to get even a viewing, let alone be offered an apartment. On top of that, most of the stock is old and not modernized at all.
Even for private owners, it is better to not build and let scarcity drive the price of their investments higher, than to take the risk of building and potentially see rents or prices fall.