Canada

The problem occurs when house prices tumble from an influx of sales, and the 32% (In NZ) of your population that are paying their mortgage off on their primary residence are potentially plunged into negative equity on rising interest rates.

Once you’re there, you’re kind of fucked. You can sell, but you’ll still owe the bank money, so you can’t buy/downsize. You can’t even change banks. You’re a risky customer, so you get higher interest rates. All you can do is hope the market rebounds or declare bankruptcy.

So you’re risking fucking over 30% of your nation (and arguably the most productive segment of your country as they’re earning money to pay that mortgage), to appease a fraction of (as not every renter can/wants to buy. Eg, students, temporary immigrant workers etc) the 30% of renters that are being fucked over by high house prices.

Not to mention, all the renters you’ve displaced into an even more competitive rental market.

But that’s not to say the solution is to shrug your shoulders and let the landlord class continue to punch down.

It would be expensive, but you could guarantee (current) mortgages for primary residences in cases of financial hardship. Buy mortgagees out and turn the houses into state housing, renting them back to the previous owners at fair prices.