Are you unfamiliar with the concept of Leverage? Sure, having an investment keep pace with inflation isn't phenomenal, but in the US it's standard to put 20% down of the house value. So if inflation is 3%, I can realize 15% on my investment.
Your interest costs will be proportional to your leverage so you need the asset to outperform your interest rate to realize anything.
I can either live in the home, saving livings costs (rent), or I can rent it out and generate income, which will pay for the interest on the loan.