Real estate can be rented out (or otherwise "used"), so it "produces" income.
He's not solely investing in real estate in the hopes the value increases, he's saying it's a better investment because it produces income whether or not the value increases.
money.stackexchange.com/users/12894/Joe
Gold is a commodity.
If I have some gold, my gold is exactly the same as someone else’s gold.
I have absolutely no control over the value, and when I go to sell it, my price is completely dependent on what everyone else in the market is doing.
I compete with every other seller on price alone; there is no other way to differentiate my product.
For real estate, there are no two parcels alike.
For starters, location, which is a huge factor in the value, is different for every piece of land.
Real estate can be developed to increase the value, and developments on land affect the value of others nearby.
Real estate can be used for many things to generate income, such as running a business or renting to someone else.
money.stackexchange.com/users/10997/Ben Miller - Remember Monica
Isn't real estate's price increase only driven by other people's demand
Yes, that's what makes it productive.
Productive assets, in general, have prices that are largely based on their ability to produce income.
If you are putting money into real estate hoping to make money from price increases, you aren't treating real estate as a productive asset, but instead as a speculative asset.
If you aren't expecting to make money from price increases, but are instead expecting to make money from rent or other value produced, then you are treating it as a productive asset.
I fail to see how real estate produce periodic profit like farms or business.
I fail to see how you could fail to see that.
Real estate generally produces rent.
It can also produce income from economic activity taking place on it.
A farm is itself partially real estate; you can't have a farm without land.
money.stackexchange.com/users/62174/Acccumulation
Simplified calcualtion:If you buy a flat for $100k and rent it out for $500/Month: $500*12 / $100,000 = 6% ROI Try that with Gold ....
money.stackexchange.com/users/58209/Daniel
You have an idea to manufacture and sell widgets.
At first, you and your partner, let's call him Woz, make widgets in the garage at your home.
Eventually, the demand for your widgets grows and you need more space for widget making machines, raw materials and new employees.
You find and rent a small building in a nearby industrial park.
The owner of the land collects rent from his productive asset.
Eventually, you need even more space and, after making a cost-benefit analysis, decide that it is more efficient to buy your own land and build your own building.
It is a wonderful day when the doors open below the sign, "Patrix Widget Company."
In this way, the land, the building, the machinery, the raw materials, the invested capital and the employees are all part of the process to build and sell widgets.
Remove the land and building from the equation and there are no widgets produced.
Real estate, in this way, is a productive asset.
money.stackexchange.com/users/14790/chili555
In  Berkshire Hathaway 2011 letter , Buffet said that:   My own preference – and you knew this was coming – is our third category: investment in productive  assets, whether businesses, farms, or real estate.   I fail to see how real estate produce periodic profit like farms or business. Isn't real estate's price increase only driven by other people's demand? How does it differ from gold, which he considers as  unproductive ?
Why does Warren Buffet consider real estate as productive asset?
money.stackexchange.com
<investing><assets><value-investing><investment-property>
money.stackexchange.com/questions/90502
money.stackexchange.com/users/66784/PatrixCR
Real estate can produce income from rental or development so it's a better investment because it produces income whether or not the value increases.  Real estate can be rented out or used for other purposes so it produces income or rent. So with real estate you are not only investing in real estate in the hopes the value increases, but it is also a better investment because it produces income whether or not the value increases. Real estate can be developed to increase its value, and developments on land also affect the value of others nearby. It can also be used for many things to generate income, such as running a business or renting to someone else.  
Real estate can be rented out or used for other purposes so it produces income or rent. So with real estate you are not only investing in real estate in the hopes the value increases, but it is also a better investment because it produces income whether or not the value increases. Real estate can be developed to increase its value, and developments on land affect the value of others nearby.It can also be used for many things to generate income, such as running a business or renting to someone else.  