Market investment, ie. where little new value is added, is gambling dressed up to look respectable. It's all about getting something for nothing which is the root cause of all our economic ills.
I try to be careful with how I think about these things, so I don't go off the deep end. In my mind, investment is the adding of value while trading does not add value. Both are gambling on the outcome, but investment tries to direct the outcome while trading tries to predict the outcome.
In the context of housing, investment may look like a renovation to improve desirability or replacing a small number of units with a larger number of units. In contrast, trading would involve maintaining the status quo in hopes that the desirability of a neighbourhood or relative scarcity would increase the value of a property.
That being said, I don't know how you would create a system of investment that doesn't create an environment for speculative trading. In would be difficult to encourage the former without a means of selling off the investment at a later date. Reducing the frequency of trading wouldn't help in the case of housing since those are long term investments to start with.
