What does speculative building refer to?

Speculative building refers to the construction of a property without a specific buyer in mind. This approach involves developers constructing homes or commercial properties based on market demand projections, anticipating that buyers will purchase the completed structures. This strategy is considered speculative because it carries the risk that the developer may not find a buyer upon completion, which can lead to financial challenges. Developers engaging in speculative building often rely on market analyses and trends to determine what types of properties will be in demand, aiming to sell them once construction is finished.

The intent is centered around tapping into market opportunities rather than catering to a predefined buyer, making this type of building distinct from other construction methods where a developer has a specific client already identified.