CoreLogic recently released its first Property Flipping Report for 2017. The report provides an in-depth analysis of residential real estate that was “flipped,” or bought and resold within a short time frame with the purpose of making a profit.
The research measured two sets of flips: resales within one year of initial purchase, and those made between one and two years. Additionally, the research tracked national trends in flipping over a 20-year period, from June 1997 to June 2, 2017.
Nationally, the overwhelming majority of properties (nearly nine in 10) were flipped for a profit in 2017. This included properties resold within a year of purchase (89.1%) and properties resold within one to two years of purchase (89.9%).
Overall, property flipping accounts for a small percentage of property sales nationally. Only 1.3% of dwellings resold over the year to June 2017 were previously held for less than a year. Moreover, 5.7% were placed back on the market within one to two years of ownership.
Historically, the rate of property flipping has dropped. Over the year to June 2017, 5.7% of property resales across the combined capitals were properties that were flipped within one to two years of acquisition. In contrast, the rate was 11.3% in 2002.
Not surprisingly, Sydney and Melbourne were the most profitable capitals for property flipping. Regional NSW (94.5%) recorded the highest percentage of flips at a profit within one to two years of acquisition, followed by Sydney (94.3%) and Melbourne (93.7%). All markets trended above the national average of 89.9%.
Darwin was the least profitable capital for flipping. Approximately three in 10 (29.7%) properties flipped within one to two years of purchase sold for a profit, followed by approximately half (52.3%) in Perth.
The regional Northern Territory recorded the least profitable market one year after purchasing. Only 50% of flips were profitable, followed by Darwin (64.7%).
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