hi. I have been in the building trade for many years and have never heard that one before!! maybe your neigbour has had a bad experince with termites and has associated it with the paint on the house!! however, once painted, you kind of have to live with it and re-paint every five years or so, as getting the paint off would be near impossible, now its been done. one tip though, use good quality stone paint like leylands stormshield, as cheap paint will cause you problems for yaers to come.