Investing in housing should lead to building more housing, which will lower prices for everyone. Is the investment only used to renovate existing housing?
Buying a house (in NZ) is a liquid investment with better returns than the stock market and no captial gains tax. Building involves much more risk, nimbyisn, geographic constraints. The cost of building is more closely related to the cost of labour than it is materials, so even at higher prices margins aren't nessecarily better.
Usually it's used to re-sell and re-mortgage the same run-down Victorian houses over and over again with no improvement at all. As a student tenant I had my fair share of renting horror houses that were lethally dangerous