I think the issue is that if housing prices hadn't gone up, they could buy a house of equal price without triggering capital gains. So if your house is 1m and

I think the issue is that if housing prices hadn't gone up, they could buy a house of equal price without triggering capital gains. So if your house is 1m and 10 years later stays at 1m, then you can swap for any other house in the neighborhood. If your house was 1m but in 10 years becomes 2m, and all the other houses in the neighborhood are now 2m... you would hypothetically not be able to swap for another home. You now have 1.75m to buy with. A good problem to have, no doubt.