Yeah, significant portion of the developed world is shrinking not growing.

Regardless, housing demand is more directly influenced (and influences) net household formation, and it is very regional and dependent on regional economies. There are rust belt communities in the US which suffered decades of net negative household formation even as the US population ticked up. Detroit and Baltimore had peak populations in 1950. While many would consider portions of them blighted and undesirable, that was more the result of and less the cause of the population decline.