Not really, if it means that the stagnant market get going again all to the good. Prices have to be at a level that can be afforded. Cut out the first time buyer and that means standstill. If the value of my, owned outright, house goes down, then if I sell, the house I purchase will also be cheaper than it would have been. Swings and roundabouts.
This has been coming for a long time, fuelled by mortgagees lend ridiculous amounts, and sometimes being misled by certain desperate brokers. If lending had been kept at a sensible level then prices would have had to go with that. People can only sell for what others can pay.
I see this as simply a step back to common sense.
There may be some negative equity, but it is not the first time.