Housing Construction Economics

Someone has to pay to build the houses.

Sounds like they need more housing stock. At some point, if you keep building, it will no longer be profitable for speculators to do that.

People aren't paying huge sums for houses or paying for new construction, property developers are.

Companies which build houses also buy the current houses so it won't happen.

You are assuming that the economics of house building is such that developers would do as many projects as they could if only they were allowed to, but even in the current market, property developers are still very picky and have to make sure they can make a decent profit; land costs are only one part of that. If you let developers build 100,000 market rate places in one city, (a) they actually don’t have the resources (labor, capital) to do that in some reasonable time frame and (b) they would

if a house is such a good investment why arent these investors building more to mint millions ezpz?

Nobody's building any where demand is highest because that will depreciate homeowners' assets.

We should get a huge amount of homes being built for other reasons tbh

Isn't that the system working? If a house costs more to build than anyone would pay for it, wouldn't it would be a bad idea to build it?

Absolutely not. Investors fight with tooth and nails to keep the prices up because it's more profitable than building.