For many years, Australia was one of the hottest markets in the world for anyone looking to make big gains on property investment. The property market in many parts of Australia fluctuated greatly and this gave rise to a very keen group of people who would seek to flip these properties. The idea of flipping is that you buy a property at a low price and then sell it on for a profit shortly afterwards.
Flipping property in Australia however was something that so many people began to do, the market began to become incredibly flooded. After the 2008 financial crisis, the markets almost reset themselves and have only recently stabilized. The question therefore, is whether or not you can still flip properties in Australia, let’s take a look.
The key to flipping properties is of course, to make the most amount of profit that you can in a short space of time. In terms of flipping properties in Australia in 2017 vs flipping them in, let’s say the 90s, is that whilst there is still profits to be made, the amount which is available has slowed down a great deal. For example in Melbourne, flippers reported some profits on short term buying and selling of up to 50% given that the market was incredibly hot and extremely volatile. These days however, in a more stable and solid market, flippers can count on profits of around 15-20%, significantly lower.
One of the reasons why many were able to make so much money in the big Australian cities was that there were many buildings and properties which needed renovation work. Throughout these years, flippers could pick up dilapidated properties at auction, give them some attention and then shift them on for a profit. Because of the popularity of this kind of transaction, there are fewer and fewer of these properties throughout Australia and whilst this is great for the Australian cities, it has meant that there is less possibility for flippers to make cash in this way.
For many years, Australia was one of the best places in the world to flip properties, there is global appeal in the properties and house prices were low. In today’s world however, more and more real estate developers came to the Australian shores in search of a quick buck and this left the market extremely flooded. The flipped to this was also that many more price wars raged on which drove property prices up for buyers, whilst they remained on a stable level for residents looking to buy. The result of this is that flippers could no longer count on the big upsides which they’d experienced in the past.
The truth of the matter is that you can flip properties anywhere in the world assuming that you have the industry knowledge and the cash to do so. Anyone however, who is looking to make the same kind of profits in Australia as people were making 20 years ago, will be sorely disappointed given the stability of the market and the competition amongst developers.