[edit: patrick boyle is currently a professor at a university in the UK. He used to be a trader, his youtube channel is quite entertaining]
https://www.youtube.com/watch?v=qROG2uXPChY
Patrick Boyle uses New Zealand’s housing bust as the warning example here. At the peak, an Auckland “dunger” sold for NZ$1.81m, and average Auckland homes were around 35x median income. Since then, prices have dropped hard, recent buyers are stuck in negative equity, and a bunch of construction firms have gone under.
Main point: decades of falling interest rates let people borrow more with the same monthly payment, so prices got bid up without much actual wealth being created. Politicians made it worse because homeowners vote, so governments keep trying to protect house prices with subsidies, tax breaks, first-home-buyer schemes, and restrictions on new building.
The ugly part is that housing stops being shelter and turns into the national retirement plan. Older owners feel richer, younger buyers get wrecked, workers leave expensive cities/countries, and productive places become too expensive to live and do business in.
He compares the possible endings too: Japan let its bubble deflate slowly and got decades of stagnation, while the US/Ireland crashes were brutal but reset faster. His conclusion: economies cannot grow well if houses are treated like tech stocks with roofs instead of places to live [27:46](https://www.youtube.com/watch?v=qROG2uXPChY&t=1666s).
