In theory an huge increment in supply should balance the market. The problem is that in practice, you can't increase supply enough to "fix" it. Houses are a safe investment, so when they devalue, they are bought right away.

E.g: Portugal is one of the countries in Europe with more houses per inhabitant but the housing market for locals was completely wrecked by Airbnb and foreign buyers (good climate and cheap prices). And I say this as a centrist or even leaning right.