This is a common policy across the world. It is based on flawed reasoning, and won't work.

Simply put, housing isn't getting more expensive because investors are buying houses. The causation is the opposite: Investors are buying housing because its value is consistently going up, making it a good investment.

So why are prices going up?

Prices are formed by the forces of supply and demand. In the regions I know about, housing supply is severely limited by regulations/laws that makes building new housing hard.