The difference between Google stock and a house (if you only have one) is that you need the house, but I have not practical value for Google stock other than it's monetary value. If I sell my house I need to buy another one or rent. So I am happy if my house's value goes up, but only if it's relative to other houses in areas I would be interested to move to, because it would open the option to swap it out for another one that's better or in a location I would prefer. So if real estate prices go up everywhere that wins me nothing. I am rich, but only on paper. Housing being relatively cheap also allows for people with low capital to try out business ideas that they couldn't elsewhere. Berlin in the early 2000s was filled with awesome little shops, restaurants and cafes that would have been impossible in any other comparable city. One of the big reasons was the cheap real estate.

Good point. Even if real estate prices going up everywhere wins me nothing, however, real estate prices going down always causes me a loss if I've purchased a house with borrowed money. For instance, if I borrow $500k to buy a house, and its value soon after falls to $300k, I still owe the bank 500k yet my assets are only worth $300k, meaning my net worth is down by $200k. If I was renting this wouldn't happen.

I think culturally there's too much willingness to buy houses with borrowed money. The proverbial average Joe wouldn't leverage themselves to buy any other investment worth hundreds of thousands with borrowed money, yet it's seen as perfectly reasonable to borrow hundreds of thousands of dollars to buy a house. The inherent risk involved in investing a large sum of borrowed money just seems to be ignored, and then people do everything they can to keep house prices rising in order to avoid this risk materialising.