You're all assuming that a housing oversupply will result in rental decrease. I expect it will eventually, though probably very slowly, because isn't it the case that a building owner doesn't have to start paying back his mortgage if none of the property is rented out?

So isn't it there a chance that lots of these buildings will just sit empty, with the owner hoping a company will come and rent the entire block, rather than advertising for individual tenants?

From the owners point of view it's better to have an empty building with no mortgage to pay, rather than a couple of tenants bringing in a small amount of rent which doesn't come close to covering the mortgage.