Because it is contradictory. Sure, in a vacuum where there's infinite land available and no rules, supply would meet demand. In a vacuum Antarctica would be a great vacation destination with amazing views of the ocean.
In reality Antarctica is freezing cold and difficult to get to. And in reality there is a shortage of places to build new housing at an affordable price in either location mentioned.
> High prices (demand) attracting speculation (supply) should drive down rents (prices) ... [but they're not]
Should? Then why aren't they?
> new buildings are regulated through zoning and permits.