Indeed. This is policy. House prices rising generates a lot of money for the government for a lot of reasons so they try to stimulate it, so they can spend more "with less taxing". The biggest factor here is the central bank lending to banks lending you mortgages (so the high house prices effectively become a tax. You will pay either through loan repayment or rental), the second factor is "seignorage" on the total value the central bank loans out (the government can spend effectively 4% of total money lent out loan for free, more if they also cause inflation)

Governments do this in all sorts of ways, including the big one: making this the only real risk-free but effective way to save up and have a bigger pension at retirement (so any change to this system will take a LOT of money out of the pockets of old people, who often can't replace it anymore)

But if you made mortgages either have real risk for banks or stopped funding them through central bank loans ... house prices will crash down. And having inflation is simply a choice. We could choose otherwise.

The problem with changing this is that it will require a permanent reduction in government spending or a permanent (big) raise in tax. Both are non-starters.

What this does over time is it makes labor that has low productivity, such as farming, less and less realistic if you want a decent life. It is a ratchet that forces the population to make more and more money over time ... or face destitution. It's been an extremely powerful way for countries to get rich.

I think the benefits will be short lived. The long term outcome is a new class division (asset inheritors versus pure wage earners with no inheritance). This is a terrible outcome for society. I'm not convinced high house prices generated a lot of wealth for governments. Government debt is higher than previous decades, and government asset ownership is lower. I think this has been a bad strategy.