Why greed is an investor’s Achilles heel

According to the trio, Australia’s housing market may experience a second wind in the next few years. Mr Tarrant prophesied that the peak anxiety around housing affordability, interest rates and inflation has “been and gone”.

Mr Kumar agreed that “if you look at what’s being forecasted by most banks, there is a definite cycle emerging right now that could be opportunistic”, citing predictions by three major banks that interest rates will drop to the mid-3 per cent by 2024.

In times like this, when fear begins to give way to optimism, the three experts warned that feelings of buoyancy could trick investors into making risky buying decisions.

The trio were quick to clarify that the danger is not in the desire to get ahead, but in allowing your vision to be clouded by aspirations for unsustainable goals.

According to Mr Tarrant, this means: “If you get some quick wins, leverage it sensibly, but know that this is an over-and-above normality position.”

“There are dozens of examples of crises which you can take advantage of, but just don’t let greed and ego get in the way of good decisions,” he emphasised.

“You don’t want to become that greedy person making poor buying decisions, poor asset selection decisions, poor timing decisions and poor debt decisions,” Mr Waters added. “You need to have self-awareness.”

But how do you tell the difference between greed and growth? According to Mr Kumar, the best way to tell the two apart is through one simple formula: the “three ifs”.

“If it’s going to do this, if it’s going to that, and if it’s going to do that, it will work out,” Mr Kumar exemplified. “If there are too many ifs on it, then it’s not going to work out because now you’re speculating.”

The trio also suggested that thorough education, a strong support network of market-savvy mentors and professional advice can also safeguard investors from poor property decisions.

Listen to the full conversation with Right Property Group here.

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