I think the problem is seeing it as an investment. Most people won't say a car is an investment but rather a cost - the investment is transportation and its value is gained external to the sell price of the car. The home itself really ought to be considered a cost, while the land and property as a whole may (but not necessarily) be an investment.

It produces a dividend of shelter for the owner. Assuming labor and material prices are fixed, the asset should be depreciating in value from wear and use which would all point to flat or lowering value.

Assuming that it must make returns, one or more of the following must be true:

* Labor price increases

* Material price increases

* Land value increases