I see what you're saying. In any healthy economy though, there are going to be some people who make investments that lose money. That money gets redistributed to the workers they employ and circulates out through the rest of the economy. We need people to risk money in order to have the economy function. Necessarily some of those risks won't work out, but this should not be an existential threat to the economy as a whole.

A house, especially a luxury house, should be considered a purchase and not a store of value. The actual physical materials of the house only depreciate over time. Sometimes the underlying land can go up in value if it's in a desirable area, but that's not the case here.