This is a clear example of someone quoting theoretical economic arguments as if they were as rigorous as mathematical proofs (and believing the gospel that they are preaching just because the logic is, on the surface, sound).

It takes years for buildings to be built. There are a ton of regulations that exist around construction and refurbishment in most cities (for good reason). Demand increases in any part of a market will have knock on effects on other parts of that market if supply is static (if buyers are priced out of one area they move onto other areas, increasing the demand and therefore price level).

Basically, the way the world behaves cannot be quoted out of a textbook. This is economic thinking at its worst.

Where I live, London, the rental market has gone absolutely mad in the past 20 years. While there is no single reason for it, it is no coincidence that this has been happening in the money laundering capital of the world, a favourite destination for oligarchs as our governments have turned a blind eye to their dirty money in the pursuit of foreign investment.