Global data analytics provider CoreLogic has released its first Property Flipping Report, which provides a national analysis of properties that were ‘flipped’ (bought and re-sold within a short time frame with the purpose of making a profit) in 2017.
The research measures flips within one year of purchase and within one to two years of purchase. It also tracks national trends in flipping over a 20-year period, from June 1997 to June 2
Nationally, the vast majority of properties (almost nine in ten) in 2017 were flipped for a profit. This included properties re-sold within a year of purchase (89.1 per cent) and those re-sold within one to two years (89.9 per cent).
Property flipping accounts for only a small percentage of property sales overall. Only 1.3 per cent of dwellings resold over the year to June 2017 were previously held for less than a year. A further 5.7 per cent were put back on the market within one to two years of ownership.
Historically, the rate of property flipping has fallen. Over the year to June 2017, 5.7 per cent of property re-sales across the combined capitals comprised properties that were flipped within one to two years of purchase. This compares to 11.3 per cent in 2002.
However, property flipping is now on a slight upwards trajectory. Across the combined capitals, the past five years has seen a 0.6 per cent increase in properties flipped between one and two years (5.7 per cent in 2017 v 5.1 per cent in 2012) and a 0.2 per cent increase in properties flipped within one year of purchase (1.2 per cent in 2017 v 1.0 per cent in 2012). This trend is mirrored across regional Australia.
Flipping is more prevalent across the Eastern states. The highest rate of flipping occurred in Sydney, where 6.8 per cent of property re-sales over the year were flips between 1 and 2 years of property ownership. Regional Queensland (6.6 per cent) and Melbourne (6.4 per cent) also recorded a higher percentage of property sales as flips.
Sydney and Melbourne were the most profitable capitals for flipping. Regional NSW (94.5 per cent) recorded the highest percentage of flips at a profit within one to two years of purchase, followed by Sydney (94.3 per cent) and Melbourne (93.7 per cent). All trended above the national average of 89.9 per cent.
Darwin was the least profitable capital. Around three in 10 (29.7 per cent) properties flipped within one to two years of purchase sold for a profit, followed by around half (52.3 per cent) in Perth. Regional NT recorded the least profitable market one year post-purchase. Only 50 per cent of flips were profitable, followed by Darwin at 64.7 per cent.
reposted from Corelogic