This is why housing is such a goose laying golden eggs and why successive governments are frightened to death of killing it. I've just done the sums on my house, bought 8 years ago. It has appreciated 6% a year, compound. Tax free of course, it's my home. That's as good/possibly better than my pension investments over the same time. I didn't have to buy this one, I could have bought a cheaper house. Am I ever glad that I didn't. I get the benefit of a bigger house in a nice area, there's no real financial downside to owning it, barring slightly bigger heating bills and fractionally more council tax (3/10 of bugger all compared to the old, smaller, house) and I'm being paid to live here!A lot depends on how you predict the capital growth. From the house you may get 5% income and 5% growth.
No wonder prices have been going so mad, if you can borrow cheaper than prices are rising you're foolish not to.