Instanced housing would be OK. But I actually like hanging around the housing ward and seeing other peoples houses and hanging out with people by the MB(my new FC and old FC are neigbours and we all hang out and chat by the nearby MB).

Housing wards are a big part of the social aspect of the game that I enjoy. Having all housing shunted into individual instances where you only see your own house and can only interact with people you invite over would kill that aspect, even though it would help solve the housing availability issue.