[joyeuse6701]

I think what you describe is true for the secondary market, but not the primary. Buying real estate and hoping market forces solely will help you generate a return would seem a poor use of money for the purpose of increasing the general quality of life for everyone.

On the other hand, real estate development, turning a barren lot into apartments with amenities, or single family homes, would seem to be productive and helpful, both are investments.

The same is true for investment accounts, secondary market trades in stocks and the like would match your analysis, but not so for IPOs, which presumably is being used for productive things by the company.

[TheOtherHobbes]

But market-based economics doesn't distinguish between those cases. If it's more immediately profitable to speculate, then speculation happens. If it's more immediately profitable to build apartments for the super-rich then apartments for the super-rich will be built. (And there will probably be a bubble in which the apartments remain empty "for investment", followed by a price crash, as numerous cities have discovered.)

What will not happen is affordable housing for the majority of the population.

Simplistic monetary analyses are incredibly bad at estimating social value, and even worse at maximising the returns from network effects that become possible when you allow for the benefits of wider wealth distribution.