If so, are the builders so confident of continued demand that they're willing to fill every available square foot of land with a house or apartment?
The builders already purchased the land & put in the infrastructure (sewage, water, electrical …). They already put too much money in the project to walk away. They have no choice but to press forward.
So, it's not that the builders are "confident of continued demand". It's "if we press forward we'll lose a lot of money, if we walk away we'll lose even more".
