The market is not terrible pumping out houses fast, but the current market conditions mean that said houses/apartments are not affordable for most people.

The average rent in Berlin (and other German cities) is not very high but that's because a lot of flats still run on a very old contract. If you're moving to Berlin, finding an apartment is incredibly difficult, even if you're willing to spend a lot of money. My grandmother lives by herself in a 90sqm flat in a really nice area and pays 400 Euros a month. In the last 10 years she tried to find a smaller flat (30-40 sqm) for herself but the cheapest she could find was 750. So she stays where she is and just doesn't use 2 of the rooms she has except for storage. In the meantime, a friend of mine moved to Berlin and couldn't find a decent 60sqm flat for less than 1400 Euros. The only way to get those affordable rents is either knowing someone who is moving out or getting super lucky by finding and getting it through a public ad.

Massenbesichtigung (mass viewings) are not uncommon. The agent will publish a public timeslot and literally hundreds of people lined around the block will show up to view a single flat.

The main reason new housing is extremely expensive has to do with regulations themselves.

It costs a lot of money to build a new apartment building because land where you are allowed to build is regulated by the State. Also the State requires many regulations that increase unnecessarily the costs, and most of all in the name of the ideology.

For example, housing standards of Japan and the US, which are way cheaper and still serve two of the richest countries in the world, would never be allowed in Germany. That makes housing unaffordable and drives people into poverty.