Property Developers vs Investors
When we buy a pair of running shoes at a discount department store for around $40, it represents better value than a high-end brand sold at a specialist retailer for $200. The cheaper pair might perform at half the level for one-fifth of the cost. This is common in manufacturing. The cost of producing that extra increment of quality and design often rises exponentially, and higher-end manufacturers also carry higher overheads based on the per-unit cost of their production. In that context, the $200 pair of shoes can still be fair and justified. The principle is simple. When we pay more, we expect something extra in return, and usually we receive it. This is the meaning behind the proverb “you get what you pay for”. Importantly, when it comes to necessities, there is choice. If someone cannot afford premium Nike Air running shoes for their feet or have Louis Vuitton luggage for their travelling, many affordable alternatives they can readily access still meet the same basic need. No one is excluded, regardless of income. This principle underpins ethical trade across all goods and services.
Before the housing market became distorted into a Ponzi structure, property development followed similar ethical principles. Developers would purchase large parcels of land and subdivide them into individual lots. The completed homes would then be sold to individuals, and the developer’s profit came from financial capacity and expertise. Buying land in bulk significantly reduced the cost per square metre, and purchasing materials in volume secured significant discounts. Greater capital allowed stronger negotiation with trades and service providers and enabled the employment of builders at scale. In this model, profit was earned through expertise, coordination and financial power, not through artificial price inflation.
Small-scale builders and architects can operate as true property developers without large amounts of capital or strong purchasing power. By buying wisely and working within realistic constraints, they can deliver healthy margins on individual projects and build long-term wealth. This is achieved by identifying overlooked sites, designing buildings that respond intelligently to the land, and using thoughtful architecture to elevate less desirable locations. Through strong design, efficient planning, and appropriate material choices, developments on cheaper sites can rival, and sometimes surpass, the quality and appeal of similarly sized projects built on more valuable land. Real value is created through skill, strategy, and problem-solving, not through inflated land prices.
Likewise, hands-on builders who actively develop their own projects can earn substantial incomes without significant capital or access to cheap land. By supervising less-experienced, lower-paid labourers and contributing their own labour, they reduce total build costs and increase profitability. In this case, experience, efficiency and physical involvement become the profit margin. This approach keeps small projects viable, ethical and productive, proving that development and wealth creation do not require speculation or excessive leverage.
The practices described above represent proper manufacturing and supply and do not, on their own, artificially inflate real estate values. These builders and developers are no different in principle from manufacturers of shoes, clothing, televisions, electrical equipment, vehicles or furniture. To profit legitimately, something must be manufactured or significantly improved. There is no ethical basis for buying a finished product, doing nothing to it, and reselling it years later for substantially more than the original price.
In general, almost everything we purchase depreciates, except for a small number of collectables and assets. A television bought today for $3000 may fetch $300 - $600 in five to ten years later. This applies to computers and millions of other manufactured goods. Some items depreciate more slowly than others, but with few exceptions, value declines over time. Repeated resale at ever-increasing prices violates basic trading ethics, especially when price growth far exceeds CPI. Property is different, but only to a point. Buildings can depreciate over time, but maintenance can offset this. Land can increase in value due to genuine demand, infrastructure and economic growth. However, even with these factors, property values must still rise within ethical and economic boundaries. Increases should reflect CPI, real construction costs, material improvements and justified land appreciation. What caused the housing crisis was not normal growth but artificial, disproportionate increases, entirely detached from wages, productivity and national skill levels.
Even multi-sales-level schemes selling perfumes, cleaning products or accessories at $40 when they were only worth $10 were widely condemned as unethical under the pyramid marketing description. That is why such schemes are illegal in most parts of the world. By comparison, what housing has become makes those banned practices seem mild, because the overcharging involved there was measured in tens or hundreds of dollars. In housing, the overcharging is measured in hundreds of thousands and millions. This has occurred while national skill levels decline and Australia accumulates trillions of dollars in debt.
The most essential and sought-after necessity in life, a home, has been transformed into a trading stock using a Ponzi-scheme structure of unprecedented scale. On a dollar-for-dollar basis, the distortion is far greater than anything seen in banned marketing schemes for low-cost consumer goods. It would be absurd and unethical to raise the price of a jar of jellybeans using the same logic applied to housing values, yet this is precisely what has happened. As a result, the system has become fundamentally corrupted.
What is happening is extremely serious. The supply-and-demand argument does not adequately explain this, nor does the claim that immigration alone drives rent and housing prices. These explanations do not withstand scrutiny. There is much more happening beneath the surface, and a complete account cannot be publicly disclosed through this website. For that reason, this article, like many of my others, can only go so far in public form.
The core of this article is that for any entity to earn the right to profit on a large scale, particularly from something essential to society, that profit must be earned. A builder, regardless of level, earns the right to profit from real estate because they are technically a manufacturer, not a flipper. Their profit is justified because it arises from creation, efficiency, and risk, as it does in all forms of legitimate manufacture.
This principle applies to trades and manufacturing more broadly. A qualified tradesperson can often charge a high hourly rate because of efficiency. What they can complete in a few hours may take an untrained or semi-skilled person several days. The value is not only in the final result, but in the time saved, the precision of the work and the resources invested over the years to reach that level of competence. Their profit is effectively the savings and convenience they generate for their clients. This is ethical, logical and widely accepted.
Builders fall under this same principle. Their profit stems from their ability to build more efficiently, source materials more effectively, manage labour, and reduce costs through experience. By contrast, investors do not add value in this way. An investor, a category that includes short-term owner-occupiers, earning significant returns from reselling real estate without participating in manufacturing or any meaningful improvement is best described as flipping. This practice is widely recognised as unethical trading in the luxury watch sector, despite it being largely aimed at wealthy buyers of luxury goods, yet it is increasingly used without scrutiny in mainstream housing, an essential product for living and well-being, not a luxury. This is not merely wrong but, in the writer’s view, represents a crime against humanity, as it primarily contributes to the exploitation of younger generations and people outside the highest income brackets by denying them access to stable housing, given that housing is a fundamental human necessity.
Notably, landlords with long-held properties and low or no debt, who could have maintained lower rents without financial pressure, began aligning rental prices with industry guidance and prevailing market trends. These increases were not driven by necessity but by the expectation of sustaining returns for newcomer investors, who were often highly leveraged and reliant on tenant payments to cover full mortgage repayments, and in many cases more than the actual cost of the loan. This behaviour is opportunistic and unethical, yet it has become normalised.
As rents increased, basic home prices rose alongside them. Higher rents justified higher property values, and higher property values justified even higher rents. For tenants, this created a closed loop. Rising rental costs prevented meaningful savings, while rising house prices ensured deposits remained out of reach. Tenants were forced to remain tenants, not by choice or lack of effort, but because the system was structured against transition. What was once a temporary stage in life became a permanent condition for many working individuals and families.
To make sense of this behaviour, apply the same principles to other goods or services, and it immediately fails. A television, a vehicle or an appliance does not double in value simply because it changes hands. Housing follows the same logic, yet has been treated differently. This distortion did not occur naturally. It was reinforced through repetition, promotion and acceptance, until it appeared normal. That normalisation is now a central cause of housing unaffordability and a significant contributor to the broader global economic and social breakdown we are experiencing.
The individuals participating in this system, whether investors or owner-occupiers, are not in themselves the root cause of the problem. Most people act within the incentives placed in front of them. When policy settings, credit conditions, taxation structures and cultural messaging all reward speculation and unjust extraction, behaviour follows accordingly. Responsibility therefore lies not primarily with individuals responding rationally to the environment they are placed in, but with the institutions that shaped and enabled that environment.
Before the housing market became distorted into a Ponzi structure, property development followed similar ethical principles. Developers would purchase large parcels of land and subdivide them into individual lots. The completed homes would then be sold to individuals, and the developer’s profit came from financial capacity and expertise. Buying land in bulk significantly reduced the cost per square metre, and purchasing materials in volume secured significant discounts. Greater capital allowed stronger negotiation with trades and service providers and enabled the employment of builders at scale. In this model, profit was earned through expertise, coordination and financial power, not through artificial price inflation.
Small-scale builders and architects can operate as true property developers without large amounts of capital or strong purchasing power. By buying wisely and working within realistic constraints, they can deliver healthy margins on individual projects and build long-term wealth. This is achieved by identifying overlooked sites, designing buildings that respond intelligently to the land, and using thoughtful architecture to elevate less desirable locations. Through strong design, efficient planning, and appropriate material choices, developments on cheaper sites can rival, and sometimes surpass, the quality and appeal of similarly sized projects built on more valuable land. Real value is created through skill, strategy, and problem-solving, not through inflated land prices.
Likewise, hands-on builders who actively develop their own projects can earn substantial incomes without significant capital or access to cheap land. By supervising less-experienced, lower-paid labourers and contributing their own labour, they reduce total build costs and increase profitability. In this case, experience, efficiency and physical involvement become the profit margin. This approach keeps small projects viable, ethical and productive, proving that development and wealth creation do not require speculation or excessive leverage.
The practices described above represent proper manufacturing and supply and do not, on their own, artificially inflate real estate values. These builders and developers are no different in principle from manufacturers of shoes, clothing, televisions, electrical equipment, vehicles or furniture. To profit legitimately, something must be manufactured or significantly improved. There is no ethical basis for buying a finished product, doing nothing to it, and reselling it years later for substantially more than the original price.
In general, almost everything we purchase depreciates, except for a small number of collectables and assets. A television bought today for $3000 may fetch $300 - $600 in five to ten years later. This applies to computers and millions of other manufactured goods. Some items depreciate more slowly than others, but with few exceptions, value declines over time. Repeated resale at ever-increasing prices violates basic trading ethics, especially when price growth far exceeds CPI. Property is different, but only to a point. Buildings can depreciate over time, but maintenance can offset this. Land can increase in value due to genuine demand, infrastructure and economic growth. However, even with these factors, property values must still rise within ethical and economic boundaries. Increases should reflect CPI, real construction costs, material improvements and justified land appreciation. What caused the housing crisis was not normal growth but artificial, disproportionate increases, entirely detached from wages, productivity and national skill levels.
Even multi-sales-level schemes selling perfumes, cleaning products or accessories at $40 when they were only worth $10 were widely condemned as unethical under the pyramid marketing description. That is why such schemes are illegal in most parts of the world. By comparison, what housing has become makes those banned practices seem mild, because the overcharging involved there was measured in tens or hundreds of dollars. In housing, the overcharging is measured in hundreds of thousands and millions. This has occurred while national skill levels decline and Australia accumulates trillions of dollars in debt.
The most essential and sought-after necessity in life, a home, has been transformed into a trading stock using a Ponzi-scheme structure of unprecedented scale. On a dollar-for-dollar basis, the distortion is far greater than anything seen in banned marketing schemes for low-cost consumer goods. It would be absurd and unethical to raise the price of a jar of jellybeans using the same logic applied to housing values, yet this is precisely what has happened. As a result, the system has become fundamentally corrupted.
What is happening is extremely serious. The supply-and-demand argument does not adequately explain this, nor does the claim that immigration alone drives rent and housing prices. These explanations do not withstand scrutiny. There is much more happening beneath the surface, and a complete account cannot be publicly disclosed through this website. For that reason, this article, like many of my others, can only go so far in public form.
The core of this article is that for any entity to earn the right to profit on a large scale, particularly from something essential to society, that profit must be earned. A builder, regardless of level, earns the right to profit from real estate because they are technically a manufacturer, not a flipper. Their profit is justified because it arises from creation, efficiency, and risk, as it does in all forms of legitimate manufacture.
This principle applies to trades and manufacturing more broadly. A qualified tradesperson can often charge a high hourly rate because of efficiency. What they can complete in a few hours may take an untrained or semi-skilled person several days. The value is not only in the final result, but in the time saved, the precision of the work and the resources invested over the years to reach that level of competence. Their profit is effectively the savings and convenience they generate for their clients. This is ethical, logical and widely accepted.
Builders fall under this same principle. Their profit stems from their ability to build more efficiently, source materials more effectively, manage labour, and reduce costs through experience. By contrast, investors do not add value in this way. An investor, a category that includes short-term owner-occupiers, earning significant returns from reselling real estate without participating in manufacturing or any meaningful improvement is best described as flipping. This practice is widely recognised as unethical trading in the luxury watch sector, despite it being largely aimed at wealthy buyers of luxury goods, yet it is increasingly used without scrutiny in mainstream housing, an essential product for living and well-being, not a luxury. This is not merely wrong but, in the writer’s view, represents a crime against humanity, as it primarily contributes to the exploitation of younger generations and people outside the highest income brackets by denying them access to stable housing, given that housing is a fundamental human necessity.
Notably, landlords with long-held properties and low or no debt, who could have maintained lower rents without financial pressure, began aligning rental prices with industry guidance and prevailing market trends. These increases were not driven by necessity but by the expectation of sustaining returns for newcomer investors, who were often highly leveraged and reliant on tenant payments to cover full mortgage repayments, and in many cases more than the actual cost of the loan. This behaviour is opportunistic and unethical, yet it has become normalised.
As rents increased, basic home prices rose alongside them. Higher rents justified higher property values, and higher property values justified even higher rents. For tenants, this created a closed loop. Rising rental costs prevented meaningful savings, while rising house prices ensured deposits remained out of reach. Tenants were forced to remain tenants, not by choice or lack of effort, but because the system was structured against transition. What was once a temporary stage in life became a permanent condition for many working individuals and families.
To make sense of this behaviour, apply the same principles to other goods or services, and it immediately fails. A television, a vehicle or an appliance does not double in value simply because it changes hands. Housing follows the same logic, yet has been treated differently. This distortion did not occur naturally. It was reinforced through repetition, promotion and acceptance, until it appeared normal. That normalisation is now a central cause of housing unaffordability and a significant contributor to the broader global economic and social breakdown we are experiencing.
The individuals participating in this system, whether investors or owner-occupiers, are not in themselves the root cause of the problem. Most people act within the incentives placed in front of them. When policy settings, credit conditions, taxation structures and cultural messaging all reward speculation and unjust extraction, behaviour follows accordingly. Responsibility therefore lies not primarily with individuals responding rationally to the environment they are placed in, but with the institutions that shaped and enabled that environment.
© Marcus Mark (Mark Khoury), MarcusMark.org. All rights reserved.