That realized capital gain is financed essentially by the mortgage extension to the homebuyer, and the proceeds, in turn, are used to finance some combination of a down payment on a newly purchased home, a reduction of other household debt, or purchases of goods and services or other assets. Home equity loans and funds from cash-outs are generally extractions of unrealized capital gains.
This catch-upstyle growth will be short-lived though, unless it is underpinned by the gradual sophistication of the industrial structure. History shows that many economies have faced difficulties in advancing beyond the status of a middle-income economy.