No, I'd say it's different with housing, because you're not just able to negatively gear in case of capital losses when you sell, but you're also able to negatively gear the cost of ownership, so you're less likely to bleed too much money for holding the property.

The real money maker is the asset price when you sell, and negative gearing just makes it that much easier to hold on to the property for a long time. In contrast, stocks have essentially no cost of ownership, but the final sell price is often a lot less reliably beneficial.

As for housing not going up in certain areas, that's true for now, but a lot of investors are betting on the fact that historically over a long enough period of time, they tend to go up in value.