QBE Australian Housing Outlook 2016 - 2019

Thats a broad statement

Investors who jumped into mining towns in 2001 made a killing, those who purchased at peak 2007 lost their shirts. Its all about timing

 

These people who bought in the mining towns are speculators, not investors.
What is the difference between investing and speculating?

 

.... I believe all investors are speculators

 

Speculators aren’t all investors though. Bitcoin buyers can not be considered investors.

Mining towns are like bitcoin purchases. Buy with the thought that maybe there’s a irrational bubble market and get out before it bursts, it isn’t for the long term and there is a high chance of quickly losing money too.

 

my theory is we are all speculators to a degree and just dont realise......because nothing is guaranteed when it comes to investing, however you can reduce risk

 

I agree with this.
We think property goes up based on what we see historically. Some areas are much more likely to be more volatile and some places more steady.
Now say Sydney, I guess you could say it’s speculation or investing. Certainly if you just buy for rental yield it’s not great, but the long term capital appreciation is there. And yes, this is where timing comes in.

People buying in mining towns, it’s different kettle of fish. When there’s no buyers, can’t get tenants, you are really stuck with a lemon.... that’s a disaster that many people take years to recover from if they don’t have a solid financial platform. That’s speculation.

 

I would call an investor, someone who makes their investment decisions based on factual data and do not allow their emotions to get involved. One that analyses a potential investment, pragmatically calculates exactly what it is worth, and will not buy the property unless it is at a price of its feasible value.
- from what i have read, there are a few on here.

on the other hand, I consider a speculator is a person who buys on emotion or a hunch (a bit like red or black in Roulette) or possibly just follows the herd.
- from what i have read, there are a few on here.

In a boom (like we have just had) both strategies might be successful. Entering more challenging times, as we are, I would go for option 1.

 

Yes

We also believe rents continue to rise, not so they can also fall back, as we are seeing at the moment in some States, its totally dependent on the product and whether there is oversupply

Interest rates are out of our control and change of policy is out of our control, same as economy and dependent on what government comes into power also out of our control.

Mining towns - so the investors who made a killing because they purchased in 2001 in mining towns when it was the beginning of the mining boom are speculators of course, but they were smart enough to recognise that it was the beginning of a mining boom. So they captured growth and cash flow

The investors who purchased in mining towns at peak in 2007 well they lost their shirts, ignored the warning signs, there was plenty of data, information available that clearly showed the mining boom was over/slowing down, but they still continued to purchase.

We are all speculators, there will be investors today buying in Melb and Syd because they believe they are now going to buy bargains.

MTR

 

I agree investors take a calculated risk on the numbers the deal, looking at the facts they have on the day

The point is we are speculators because many factors are not in our control, we make assumptions on the day of purchase, we speculate that rents will rise, interest rates will stay the same. economy will continue to boom.

Same as Developers they are at the mercy of markets, they do the numbers on the day of purchase, the feaso, but by the end of the project the market may have turned and the end product is down 20% not up 20%. So are these investors speculators?

Risks are very high today IMHO..
So are you a investor or speculator when you are buying in a downturn....?? Regardless of what the numbers are, if market conditions are ignored you are a speculator. Probably have a good chance of capital shrinking