Who wins when house prices are on the rise and who loses when they aren’t?

For decades Australia has cheered rising house prices as a sign that things are going well.

If your home was worth more this year than last, life felt a bit easier.

Politicians celebrated, homeowners smiled, and banks (who hardly do anything besides handing out mortgages) quietly tallied record profits.

We were introduced to the concept of the wealth effect – allegedly we spend more money simply because we feel richer when our house goes up in value (never mind whether or not our disposable income actually changed).

But after 30 years of almost uninterrupted price growth, Australians are beginning to ask – Is it actually good for us when house prices rise?

The answer depends on who you are: In housing, there are always winners and losers.

Rising prices make most Australians feel wealthier. About two-thirds of households own their homes, either outright or with a mortgage, so for them a price rise is a tax-free wealth increase.

John Howard famously quipped that he had never met a voter who complained about their house going up in value. Homeowners who feel richer borrow more, renovate more, and spend more at the local café – which is why so many parts of the economy quietly prefer house prices to keep climbing.

When the value of bricks and mortar rises, countless winners are created as my (certainly incomplete) list of stakeholders who prefer higher house prices shows:

• Homeowners and property investors – their assets grow in value.

• Banks and mortgage lenders – bigger loans mean longer mortgages and higher interest revenue.

• Mortgage brokers – earn larger commissions on higher loan values.

• Real estate agents – commissions rise with sale prices.

• State governments – collect more stamp duty and land tax.

• Federal government – benefits from larger capital-gains-tax receipts.

• Superannuation funds and SMSFs – higher property valuations boost returns.

• Tradies, architects, and builders – wealthier homeowners spend more on renovations and construction professionals can increase their margins.

• Hardware and homewares retailers – benefit from the “wealth effect”.

• Property photographers, stylists, and marketing firms – higher........

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