Because the new houses built are intended to be bought buy people who have money at incredibly high prices.
This argument is the one the property developers put whenever citizens object to selling real estate overseas.
In effect "don't complain, just build us more houses to sell overseas! that will solve the problem"
The demand is not infinite. If these new luxury houses actually do sell to the people who have the money to pay the incredibly high prices, what happens to the existing houses that were not purpose-built to sell to the rich? If the new houses satisfy even a part of the demand, prices on the existing houses have to drop.
This is like saying "all the rich chinese are buying up all the expensive top end iphones and now all the poor people of the earth and the seas can not have smartphones for their enjoyment".
Again and again I see the same 'fixed size pie' argument when somebody argues for special privileges for the 'special class' that they conveniently belong to.
What about all the canadians who bought their house 4 years ago and now have their property price increased 200%? Nobody talks about those guys. You only hear the 'evil rich foreigner chinese taking up out houses' narrative. If you are a rich foreigner you are taking our houses and if you are poor then you are taking our jobs.
At the end of the day these narratives are just appeal to group-identity and nationalism. They are very thinly veiled attempt at enraging people to get more 'engagement' 'views' 'clicks' or whatever. And they are clearly working because people who are sensible otherwise start losing their minds.