This is BEFORE asset appreciation. That is, if the house stays the same in value in 30 years you're still outperforming the stock market's historical average.
If your salary does not increase with the inflation, you don't get the additional 4.5% in salary and then you are NOT getting 2% real returns.
Combine that with all energy costs going up and you have a real problem because the governements cannot raise interest rates (without crashing everything), that leaves banks to compensate for energy (which you cannot print) which means people are going to get hurt (the interest spread, the difference between what a bank pays to the central bank and what you pay to the bank, is going to grow until things get out of hand).
My prediction is that house prices cannot increase more than general inflation now since the margin of the central banks is now permanently zero (we have had official zero interest rate for some time, but not for the banks, only last year did the central banks remove the spread for banks to borrow money from or hold money at the central bank, but now they cannot increase the incentive to borrow ever again for this civilization) this means the debt collateral (it's not an asset if you have debt on it) wont be able to appreciate either!
And energy inflation is VERY deflationary for housing because you need to buy heat, water and food before you pay rent/interest.
One easy way to see this trainwreck in motion is to watch the state of houses that need repairs, the second you cannot borrow to repair a house the music stops. In fact, that you can borrow to do maintenance in the first place should have been enough warning.
We're living through the biggest margin call possible right now (a margin call on money itself, or as you should call it "housing backed debt" because thats 99% of it) and there is nothing anyone can do about it!
The end game is that there is a split between debt money and non-debt money in terms of what interest rate they have, and again the spread will increase until things get out of hand, they allready are; in some countries you pay negative rates on your savings above a certain amount and at the same time the loan rates will increase in the other direction!
Spreads and margins!
I guess the ups and downs are ok as long as you don't have to sell and can continue to make the payments. And taxes.
So you sold the bank a bond with an inflated par value, figuring interest rates will rise soon (lowering the bond value) and snatched a good deal. Except the banks are almost certainly better at predicting the future interest rates, and they demand a coupon rate significantly higher than the risk-free rate to compensate.
The short of it is that the banks aren't stupid; the potential for a future interest rate hike is priced in.
The exception is if the banks are selling on their mortgage bonds to someone else-- then they don't care if they're paying too much for them, and they'd be happy with the additional demand.
Isn't that how the 2008 Global Financial Crisis happened...?
https://www.investopedia.com/articles/pf/07/secondary_mortga...
So if your wages or other assets track or exceed inflation, then that debt should be paid off more easily