Properties ‘Flipped’ For A Profit- CoreLogic Report
Property information and analytical authority CoreLogic Australia has released its first Property Flipping Report from the end of 2017 revealing that nine in ten flipped properties in Australia earn a profit.
The report explains the short term residential property investment strategy of ‘flipping’ with: “a buyer purchases a home with the intent of re-selling the property in a short time frame (generally one or two years) for a profit.” The ‘flipping’ component will often involve improvements to the property to influence the highest potential profit. These improvements may take the form of renovations to the dwelling, subdivision of the land or obtaining council approval to expand potential use opportunities of the property. Investors who buy at pivotal points in the economy, with intention to sell at a profit, are also flippers.
The report shows that around 90% of properties flipped in 2017 Australia earned a profit however, the strategy certainly has its risks. 10.9% of Australian properties flipped within 12 months and 10.1% between 12 and 24 months, did so at a loss. Brisbane flipping fared similarly with 11.3% of properties held for less than 1 year incurring a loss at resale compared to 10% of flipped properties held between 1 and 2 years.
Flips in regional Queensland were less successful than those in Brisbane however with 14.1% of flipped properties of less than 12 months resulting in a loss to those investments and 11.7% incurring a loss when sold within 1 and 2 years.
Overall houses flipped between 1 and 2 years fared slightly better than those held for less than 1 year. Interestingly, the report also indicates that a trend is rising in flippers selling between 1 and 2 years while the trend for selling under a year has remained the same. Flips of less than 12 months, occurring in all capital cities combined, fared 0.7% better than regional markets while combined capital cities fared only 0.1% better for those flipping between 12 and 24 months.
In Queensland however the difference was larger. Overall, flips in Brisbane and those between 12 and 24 months were more successful than those in regional Queensland and those that were flipped within 12 months.
See the full CoreLogic report here
