Sydney, Australia, may not be New York or London or Los Angeles, but it's a big city with a population approaching five million. It's got more people than the San Francisco area.

But unlike San Francisco (or Los Angeles, or several other major American cities), rental prices in some parts of Sydney are seeing a massive decline—as much as 100 Australian dollars a week in some places.

It is not some magical mystery as to why Sydney's rental prices are declining. And it's certainly not due to rent control. It's because Sydney's seeing a building boom. The size of Sydney's apartment market has doubled in two years, and landlords have had to drop rents in order to get tenants.

The Sydney Morning Herald reported over the weekend that the city has seen more than 30,800 multi-unit dwellings built last year, a record for any Australian city. And there still are nearly 200,000 additional dwellings in various stages of development. The city is seeing a glut driven by investors. And those investors are now leasing out the apartments.

This overabundance in rental properties has spread across the economic spectrum. Median rents in some more expensive parts of the city range around $1,400–$1,700 a month (in U.S. dollars). But there are parts of town where the median rental price is $850 a month, thanks in part to the oversupply. The glut ranges from simple apartments to townhouses, highlighting an outcome understood by those who are simply begging cities to allow more housing of any kind to be built: An increase in the supply of middle- and upper-class housing will give better choices to people moving up the economic ladder, freeing up older housing and making it more accessible to people with lower incomes.

Compare these numbers to San Francisco and its stagnant housing market. In June, median rental rates there for one-bedroom apartments passed $3,600 a month.

A policy expert for Tenants Guild of New South Wales makes it clear to the newspaper that he understands exactly why rents are coming down: "At a city-wide level, we've had rent prices set by restrictive supply for at least 14 years, probably longer. It will take more than a few quarters for prices to correct to equilibrium."

Rent prices set by restrictive supply, you say? And yet, in California, attempts to bring down sky-high rents by allowing more housing developments keep hitting walls from entrenched interests with a financial stake in keeping things the way they are. That includes current property owners who benefit from the high rates, and it includes construction unions that want their slice of the pie and are willing to abuse the legal process in order to get it.

Meanwhile, homelessness skyrockets. And rather than fixing the problem with more housing, some city leaders prefer to beg the feds for money.