China built a lot of housing and it didn't do anything until the ponzi scheme started unraveling.

Asymptotically what you said might be true, but before it gets there years might pass as they did in China. It's not clear how long this madness would last if not for COVID.

Outside of the major city cores, much of what China built wasn't "housing" in the sense that most Westerners think of housing. The buildings often looked superficially like housing but were never really usable for that purpose. They were more like physical "tokens" used as speculative trading vehicles. Now some of those are being demolished, either due to lack of consumer demand or because the "tofu dreg" construction quality was so bad that they aren't safe to occupy.

Housing prices cratered in China, because, yes, eventually supply catches up and then the ponzi schema has nowhere to go but down. Lots of people hold real estate thinking it's an investment just by itself, so it's been a vicious cycle of prices going up. But if you build enough supply, the market stops treating property that way.

I don't think the Chinese real estate market will ever truly "recover" to the Tulip Mania levels it hit before. Especially with a declining population.