I suspect you haven't been to Thailand, cuz there is a shit ton of expats hanging out there. Laws about visas and home ownership -- can't own a house unless you're Thai -- complicate that.

Exactly, nobody flocks to housing on its own: people migrate to job opportunities. Which increase with population density. If you increase housing where there is already demand due to job opportunities, then you increase density there, and then you increase the job opportunities again, and thus you increase the demand even more than what you satisfied with the new housing.

It's not as simple as "build more houses!".