That assumes an "interesting" financial investment has to appreciate faster than all other investments that exist and that nobody would ever trade returns for less risk.

People buy bonds, so I don't think that maximizing ROI is always necessarily the criteria for a desirable investment.

Thanks!

Meta-observation: to me, nothing in economics or finance is "blindingly obvious". Many economic phenomena seem obvious but in reality are way more complex than could be represented by any model that I could understand. Your explanation makes sense at some level, but I don't have much confidence in it, because all I can do is wonder what other mechanisms interact with the mechanism you've described, and what the net impact is.

I'm not sure why you're looking only at the house price change. To be a good investment, the (price change + rent - mortgage repayment - maintenance) value has to be higher than other means of saving. Thus may be true even if the house itself losses some value.

You have your causality hopelessly backwards. Housing did not become a interesting investment because people chose to invest in it. People chose to invest in it because it was an interesting investment.

and yet, reasonable people who know what they're doing buy bonds with negative interest rates.

the financial world is more complicated than you realize.

A stronger case would be "it must be more profitable than the alternatives with the same risk" but you skipped a step and went right to "appreciate faster" which is not the only way it could be profitable. In fact "flipping houses" to make a living at this scale is an artifact of your current time and place which is the US in a massive inflationary bubble [1]

We libertarians have been beating the inflation drum for decades now and been largely ignored and / or laughed at. Maybe it's time to revisit how adding trillions and trillions to the economy every year could maybe possibly lead to higher prices in "inflation hedge" type goods.[2]

[1] https://thumbor.forbes.com/thumbor/960x0/https%3A%2F%2Fblogs...

[2] https://mises.org/library/housing-too-good-be-true