> the most basic tenet of capitalism is that when there is a demand, someone will come along to fill it.

That's the most basic tenet of markets, not capitalism.

The mistake people defending capitalism routinely make (knowingly or not) is talking about "positive sum games" and growth. At the end of the day, the physical world is finite and the potential for growth is limited. This is why we talk about "market saturation". If someone owns all the land, you can't just suddenly make more of it, you have wait for them to part with some of it, voluntarily, through natural causes (i.e. death) or through violence (i.e. conquest). This not only goes for land but any physical resource (including energy). Capitalism too has to obey the laws of thermodynamics, no matter how much technology improves the efficiency of extraction, refinement and production.

It's also why the overwhelming amount of money in the economy is not caught up in "real economics" (i.e. direct transactions or physical - or at least intellectual - properties) but in stocks, derivatives, futures, financial products of any flavor and so on. This doesn't mean those don't affect the real world - of course they do because they are often still derived from reality - but they have nothing to do with meeting actual human needs rather than the specific purpose of "turning money into more money". It's unfair to compare this to horse racing as in hore racing at least there's a race whereas in this entirely virtual market you're betting on what bets other people will make but the horse will still go to the sausage factory if the investors are no longer willing to place their bets on it - the horse plays a factor in the game but its actual performance is not directly related to its success; from the horse's perspective it's less of a race and more of a game of shoots and ladders with the investors calling the dice.

The idea of "when there is demand, it will be filled" also isn't even inherently positive. Because we live in a finite reality and therefore all demand that exists could plausibly be filled unless we run into the limits of available resources, the main economic motivator has not been to fill demands but to create demands. For a long time advertisement has no longer been about directing consumers "in the market" for your kind of goods to your goods specifically, it's been about creating artificial demand, about using psychological manipulation to make consumers feel a need for your product they didn't have before. Because it turns out this is much more profitable than trying to compete with the dozens of other providers trying to fill the same demand. Even when competing with others providing literally the same product, advertisement is used to sell something other than the product itself (e.g. self-actualization) often by misleading the consumers into buying it for needs it can't possibly address (e.g. a car can't fix your emotional insecurities).

This has already progressed to the point where the learned go-to solution for fixing any problems is making a purchse decision, no matter how little it actually helps. You hate capitalism? Buy a Che shirt and some stickers and you'll feel like you helped overthrow it. You want to be healthier? Try another fad diet that costs you hundreds of dollars in proprietary nutrition solutions and is almost designed to be unsustainable and impossible to maintain. You want to stop climate change? Get a more fuel-efficient car and send your old car to the junker, and maybe remember to buy canvas bags. You want to not support Coca-Cola because it's got blood on its hands? Buy a more expensive cola with slightly less blood on its hands.

There's a fixed housing supply in capitalist countries because - in addition of the physical limitations - the goal of the housing market is not to provide every resident with an affordable home but to generate maximum return on the investment of purchasing the plot and building the house - and willy nilly letting people live in those houses for less just because nobody is willing to pay your price tag would drive down the resale value of every single house in the neighborhood and letting an old lady live in an apartment for two decades is less profitable than kicking her out to modernize the building and sell it to the next fool.

Deregulation doesn't fix supply. Deregulation merely lets the market off the leash, which in a capitalist system means accelerating the wealth transfer to the owners from the renters.

There are other possibilities than capitalism, and no Soviet-style state capitalism or Chinese-style state capitalism are not the only alternative. But if you don't want to let go of capitalism, you can only choose between the various degrees from state capitalism to stateless capitalism (i.e. feudalism with extra steps, which people like Peter Thiel advocate for) and it's unsurprising most systems that haven't already collapsed land somewhere in between.