> If property prices fall then it is no longer an investment.

So people who want to park their money in a house rather than living in it are discouraged to buy up the available housing.

Yup, good. Seems like it should be going exactly as expected.

So the harm is people will invest in the stock market instead of buying real estate to rent out?

It's a "safe investment" because people need a place to live and the supply is artificially constrained. Personally don't see why the barrier to having a place to live for new generations should be raised just so that boomers can guarantee returns on an asset.