Housing is a unique market, because every single product in it is unique, and prices and rents can vary quite a bit.

In a city I used to live, the city decided to revitalize a section of downtown by bringing down some old small buildings and replacing them with high rises. The resultant effect was a bloom in shops and restaurants in the area. That meant that 1km^2 area became a lot more attractive, landlords jacked up rents, and existing tenants in the other buildings in the area had to move out for people who were willing to pay 2x the rent. Of course rents probably went down elsewhere in the city to compensate.

You will never get this sort of prediction from simply supply and demand. You need to build quantitative and holistic models that make predictions based on a range of factors. Then use those to make policy.