Investors causing a rise in prices?

[camden]

Hey all,
this is one of my first topics in this forum and with all this talk about investing and first home buyers in the media at the moment I thought I'd put this question out there.

Please excuse me if this has been discussed before but my flat mate who isn't a property investor has the view that property investors are one of the causes of inflated property prices that make it difficult for first home buyers. I believe his view is that investors buy all the good low priced properties and sell them out at an inflated price.

What does everyone think?
Regards

[casey]

Hi Camden,
That's what I've heard as well, that investors make up a very small amount of the market. In my opinion I would've thought if there a lot of investors buying low, then the market value would drop like your example of Tokoroa.

The 2% figure seems so small when it appears that there are more and more investors, though the degree at which an investor invests varies. Maybe it's the whole syndrome where when you buy a car you see everyone else driving the same car.
Thanks

[10cents]

I tend to agree with your flatmate. We have this stretch of land between two cities which is agricultural in nature. When rumor started about an international airport to be built smack in the middle, speculators moved in which drove the prices of lots skyward.

[Investy]

With any investment or new business those that get in first stand to make the most.
I tell people all the time about new opportunities, the response from 95% is total disinterest. They only become interested a few years later, but of course prices have then risen. Just like clothes fashions many people take thier cue from the crowd. It can be very lonely being an investor.

You cant blame pioneers for thier good fortune, afterall they can lose on deal to.

Your freind should realise that some of us get very excited by new opportunities and that a byproduct of acting on this enthusiasm can be robust gains.

Take Morocco; Most people think Im nutz buying there. Thier instinctive reaction comes out of fear if the unknown, they cant imagine investing somewhere where 'funny brown men in dresses ride about on Cammels'. They immediately dismiss Morocco as all thier life inputs give them a mental picture of poverty and desert.

I say be open minded and most of all RECOGNISE THAT THINGS CHANGE. Morocco for example is now exporting high tech goods by the bucket load to Western Europe and 97% of kids are now in full time education whereas the figure was just 51% in 1990.

In the end someone has to invest first. Often pure investors have the confidence to stick thier necks out first, and without them many new markets wouldnt get off the ground.

Your freind should perhaps understand the benefits to locals. It is locals that own property who will suddenely find themselves with a modicum of financial wealth perhaps for the first time in thier ancestoral history. That wealth gives tham access to health and education.