Thinking out loud, trying to get my head around inflation/deflation..

Rising house prices: inflationary or deflationary?? Seems people increasingly parking more and more money in a highly illiquid asset would remove money from the private Economy..

I mean sure, the loan/money wouldn't have existed if the house didn't exist so it's not like the money is being pulled out of the Economy.. but if housing wasn't such a big focus for banks they would be trying to make interest off more productive endeavours.

On the otherhand, it's deflationary in the sense that people are spending more on repayments (due to higher prices) so they can't spend as much on goods or services. They direct more or their income to their mortgage than other things that have a better multiplicative value