This current economic situation is actually not favoring almost every sector because of inflation. The cost of everything is going up same as building materials, because of the high cost of leaving and materials, building house is not more profitable if you are building for selling purposes, that is why hotels are becoming more rampant because building a hotel is more profitabe than building a house for rent because the payement will be daily, while an appartment payment will be annually.
In my opinion, I think building a house for sell is good, and also building a hotel is also profitable.
But people that has already invested in real estate in the past will have more profit than people that just invested.
Yeah you made a solid point here about the rising cost of building materials due to the inflation condition which has affected the cost of everything. And the location is also a variable to be considered for someone who's building to sell because with the high rising cost of building materials you could spend money building a house in a location where the market value may not bring profit compared to money spent in building the house.
Wherefore you may see hotel business as been lucrative than building for annual renting but have you considered the cost of hotel maintenance, the resources to keep it in business may ware out the owner if he doesn't has what it takes to stay competitive unlike rental where there's little or no competition at all.