So how does the sharemarket go up in value?
It's all you Investors to Blame!
- Thread starter Rixter
- Start date
So how does the sharemarket go up in value?
Spread rumour maybe? Just kidding. I don't really know.
However, I do believe that if you have certain skill and you're able to add value to a property that other people are willing to pay more for, chances are that you'll be able to command a higher price for it. I don't really know how you can do that in the sharemarket(no sarcasm meant).
I think tele is talking about what drives property NOT the share market.
'Investors' dont drive the property markets. Its the 'owner occupiers' that do.
Yes but not with property because investors aren't the emotional driven majority.
Can you describe how investors are a major component when they are in the minority
Hi Rixter
prices are driven at the edge e.g.
100 properties 70PPOR buyers, 30 invetors = balanced market
100 roperties 70PPOR buyers 35 investors= sellers market
I dont know where you are getting your data but I'd like to know of suburbs where 35% are investors.
Property is owned approx 70% PPOR/30% investor.
The %'s are irrelevant.
The relevance is that when a class of buyer causes an imbalance in the market they can have a disproportionate affect on the market.
Show me how property investors are the ones to blame for driving suburb's prices up
100 properties for sale in a suburb, 90 PPOR buyers, 15 investors.
The smart investors such as yourself jump in and buy 15 at a good price
leaving 90 PPOR buyers to fight over the remaining 85.
The emotion of greed kicks in and prices then get pushed up.
Exactly, using your example... so it's not investors with multiple properties who are the ones to blame for driving up prices out of reach for the first home owners.
Can I just clarify what constitutes an investor?
To me an investor is somebody that takes calculated risk/s. Somebody who do their due diligence and proceeds if the deal stacks up. Somebody who has an exit strategy if they make a mistake, cut their losses and move on to the next deal. How many of these type of investors are in the market place?
Speculators/punters are most likely gamblers in my opinion. Somebody who puts a bet and hope to win with little or no due diligence. If they are categorised as investors, then I rest my case.
Now there was a time when properties were being snatched up by cashed up overseas buyers, paying a lot more than the market. Did they have anything to do with prices going up? I know of a few 'burbs that did. What about the marketing of overvalued properties to unsuspecting mum and dad would be investors?
The 30% and 35% is such an oversimplification. It'll be nice if it's that simple.
To me an investor is somebody that takes calculated risk/s. Somebody who do their due diligence and proceeds if the deal stacks up. Somebody who has an exit strategy if they make a mistake, cut their losses and move on to the next deal. How many of these type of investors are in the market place?
Speculators/punters are most likely gamblers in my opinion. Somebody who puts a bet and hope to win with little or no due diligence. If they are categorised as investors, then I rest my case.
Now there was a time when properties were being snatched up by cashed up overseas buyers, paying a lot more than the market. Did they have anything to do with prices going up? I know of a few 'burbs that did. What about the marketing of overvalued properties to unsuspecting mum and dad would be investors?
The 30% and 35% is such an oversimplification. It'll be nice if it's that simple.
No Rixter, in reality the PPOR/investors would be spread through the 100 sales, I was breaking it down to simple high school supply/demand economics.
Cheers
Pete
So you think Investors are to blame for first home owners being priced out?
Well investors subsidise renters because usually renters can't afford to purchase their own place or they're not in the position to do so.
30% is a major component. It's not only the majority demand that pushes up prices.Can you describe how investors are a major component when they are in the minority
Some of the biggest recent bubbles in the world (since popped) were driven by speculators (Florida, Dubai, Eastern Europe, Spanish holiday areas). Australia also has an abnormally high proportion of property speculators (i.e. negatively geared).
Countries with a very low proportion of investors/speculators have not had much price growth over the last 15 years (Germany, Switzerland).
Where would you ever draw that conclusion from my posts?
Investors are simply part of the the cycles of supply/demand.
Would you please explain how investors have no impact on supply/demand?
Cheers
Pete
