That's why we have governments, though.
I wouldn't use China as an example of solving the housing problem by simply building. There's currently a large oversupply problem [0] and, not entirely unlike the US (but more extreme), excess supply of housing has lead to people simply owning more than one property as an investment strategy.
0. https://www.wsj.com/articles/chinas-smaller-cities-struggle-...
Unrelated to the above, but China's excessive building isn't actually from central planning, but because real estate is the one of the only viable investment methods in China, and because selling land to developers is one of the only ways local governments can raise revenue. Chinese cities are quite expensive to live in (especially if you have Western standards)
Only in idealised markets. Housing markets are often not like that.
Tokyo is an example where houses are torn down every 39 years so a new one can be built. Also, given the lack of population growth in Japan as a whole, the growth rate in Tokyo is anemic. Tokyo metro area has even been losing a small amount of population in the last three years: https://www.macrotrends.net/cities/21671/tokyo/population
Rent is maybe 30% higher in Tokyo, even less if you live on the end of a train line. Can you imagine how many people would move to Bay Area CA or New York City or Boston or Seattle if their rent was only 30% higher? Pre pandemic my 3 bedroom in Boston area was 3500/mo. Since the pandemic rents have gone even higher. We have bidding wars of people trying to win a rental unit. Bidding wars. It’s ridiculous.
Also I don’t see your point about houses being torn down. If anything that should make it more expensive (since buying used and not rebuilding is cheaper). Realistically rebuilding is vital (in conjunction with subdivision) because that’s how you increase density
Osaka and Nagoya are losing people also. The changes are for metro areas, not city cores.
> If anything that should make it more expensive (since buying used and not rebuilding is cheaper).
It simply means that you can't compute new housing very easily by new housing construction rates (you have to subtract old housing demolitions).
Density currently isn't increasing (you tear down one three story narrow house and replace it with another three story narrow house, you need to buy a bunch of SFHs to make a new apartment building).
Where could you built 1M units in San Francisco? It is less than 50 square miles surrounded on 3 sides by water.
Shenzhen grew from 100,000 people in the 1980s to 13M now with no housing affordability crisis...by building. The whole pearl river delta region is essentially an 80M people megacity with no housing problems...because they continuously built. Tokyo is also a classical example of continuously building infrastructure to support millions more people per decade.