[jrek]

It's supported by both logic and experience.

It's easy to see logically if we flip the relationship. If house prices are steadily increasing (equivalent to inflation, where my purchasing power is decreasing), I want to convert my money into a house as quickly as possible. If house prices are decreasing (equivalent to deflation, where my purchasing power is increasing), I want to hold off as long as possible.

In recent experience, the rapid deflation of bitcoin has coincided with its identity pivot from medium of exchange to store of value - because why would you spend an appreciating asset?

That's not to mention the other side of the coin that deflation is necessarily accompanied by decreases in nominal income (because all the products you sell are cheaper in dollar terms, by definition) and nominal salaries.

And as coliveira stated, the economy depends on spending - and that applies just as much to an open free market economy. To suggest that the desire to want people to spend is somehow a feature unique to planned or state-run economies is nonsense.

[WanderPanda]

Sounds good to me, if you don‘t buy the house because your money is not devalued consistently. House buyers might actually get more use out of it than holding their money, instead of just (or in part) buying it for monetary reasons

[imtringued]

If the value of houses keeps going up and up at some point it becomes profitable to build more houses. It's just a matter of getting rid of stupid laws that prevent economic actors from doing so.

If the value of houses goes down over time then people will stop building houses. Housing can easily last decades or centuries if done properly. By the time the problem grows to become unsurmountable you might find that all the construction workers and companies are gone. That's what happened with the nuclear industry. You run a plant for 50 years until people retire all at once then you suddenly have to train thousands of new workers since you failed to maintain the industry.

This is a fundamental problem with providing food. Most food has to be eaten within weeks after the harvest. This means that you must ensure that at all times there are people farming for food. It's not possible to save it for decades or at least people don't want to eat 10 year old food (there are companies that specialize in prepper food). So ultimately, you need to keep the farms going all the time. How can you tell them to keep going if the price of food is going down... forever?

[jrek]

I'm on board with your socialist sensibilities when it comes to housing - but when the same effect is occurring throughout the entire economy the result is a depression.