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IMO homes should not be considered productivr capital. Farms are, as one example.

A home sits there and looks pretty (maybe), slowly losing real value. Of course, w/ an increasing population amd limited supply it accrues nominal value (and “real” value in the investment sense).

Yet compared to owning shares in an actual productive company, it’s a very poor value proposition.

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A home produces rents. If you live in the home that you own, you can think of it equivalently as a productive asset that provides you one unit of free rent (modulo some quality of life factor based on how nice the property is to live in) every month.

If that was all it was it would be fine. The trouble is, at least in the UK, property has been an appreciating asset. People have been using it as a source of current or future income rather than just a home.

If you look at it through the lens of opportunity cost, sure. But homes don't actually yield anything, they are not productive in that sense. So from the economy's standpoint, there seems little reason to classify it as such along with financial assets that produce yields.

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