To be clear, I understand what inflation is, but something that’s only keeping up with inflation doesn’t make sense to me as an *investment.* I can understand increasing value by actively doing something, like fixing the roof or adding an addition, but not by it just sitting there.
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Supply and demand. Since the population tend of increase over time, the demand increase and the price go up.
Now in most industry, if the demand increase, it’s met with an increase of supply and the price are kept relatively in check. But in the case of home, there is several limiting aspect to the industry.
The land available is limited and how long it take between thinking of building a new home and the moment that home is ready to be sold. If you build cars, you already have a big factory so you can increase or decrease the production to match the demand. But for construction, each building is unique, a separate project with land bought, plan drawn, test needed for the soil, the legal paperwork, and coordinated dozen of companies to make the final product. The increase in supply will always lag behind the increase in demand.
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