“We are not discounting [the original prices of] apartments in Brisbane, but rather managing an orderly sell down of any remaining stock we have,” Metro marketing and sales general manager Phil Leahy said.
TV presenter and renovator Cherie Barber has helped hundreds of Queenslanders add equity through renovations. Picture: Luke Marsden. Source: News Corp Australia
PROPERTY flipping — selling for a profit within a year or two of purchase — is on the rise, with new figures showing hotspots have emerged in the Sunshine State.
A massive 90 per cent of properties flipped last year — that is, bought and re-sold within one to two years of purchase — went for a profit across Brisbane, with the figure sitting at 88.3 per cent in regional Queensland.
The latest CoreLogic data found three hotspots had emerged in the state — the Gold Coast, Moreton Bay North and Ipswich.
“Property flipping was most prevalent in the Gold Coast, comprising 7.9 per cent of re-sales for properties held between one and two years,” according to CoreLogic’s Flipping Report, released yesterday.
The GC region also experienced Queensland’s biggest growth in flipping, up 1.3 per cent over the previous year’s data.
Queensland’s highest percentage of successful flips came from Moreton Bay North in 2017, where 95.6 per cent of properties re-sold within two years were profitable.
And for those in the market for a quickie, the area that was able to deliver the highest percentage of properties bought and flipped for a profit in under a year was Ipswich (92.7 per cent).
According to the report, short term property trading profits come off “buying undervalued property and reselling at a higher price, buying property at market value and riding the capital growth curve, or by adding value to the property in some way (renovation, subdivision, development approval etc)”.
CoreLogic warned that flippers needed to take into account transactional costs such as stamp duty and conveyancing, as well as selling costs like marketing and real estate agent commission, plus interest payments on the debt as well as capital gains tax on the profit.
“When housing markets are running hot, it makes sense that flipping would become more popular while when a market is weaker, owners are likely to have to hold onto properties for longer in order to return a profit.”
Queensland’s worst place to flip properties owned between one to two years was Townsville last year where 48.8 per cent were losses.
Across the combined capitals, property flipping has gone from 5.1 per cent in 2012 to 5.7 per cent last year — a rise that was being mirrored across regional Australia as well, the report said.
Renovation queen Cherie Barber has worked on over 100 flipped projects and trained hundreds of Queenslanders to “manufacture equity” in property through renovations and upgrades.
“You can buy a profitable property at any time, but not every property on the market will be profitable,” she warned potential flippers.
Originally published: www.news.com.au
Couple turns $145k into $7.5m
The massive 1.97Ha site of their family home sits in the middle of Wakerley, about 16km to the east of the Brisbane CBD – a popular area with families that’s been targeted for major subdivision work.
Property records released last week show a $7.5m deal was struck off market in late March, while just two years ago, the site was valued around $1.1m. It’s believed the property was bought for $145,000 in 1987.
Preparation for the development approval began last year, with the couple then selling to a firm that then filed a development application to split the site into 27 housing lots in the first stage and five lots in the second stage.
The large “rural” home site was surrounded by residential subdivisions on three sides and fronts Manly Road – one of the main feeder streets to the area. The new plans mean it will join seamless into the other subdivisions in the area.
The company that bought the site received development approval from the Brisbane City Council in May and waived the appeal period.
The previous highest price fetched in Brisbane’s east was at 114 Virginia Avenue, Hawthorne – an ultra-modern six bedroom, five bathroom, six car space home that sold for $7.48m in six years ago.
Built in 2008, the Viriginia Avenue home has solid concrete walls and floors over all levels, with full walls of glass fronting the river.
Metro Property’s discounts leftover Brisbane apartments
Want a bargain? Metro’s Newstead Towers in Brisbane has 20 per cent discounts. Supplied
Real estate agents are offering 20 per cent discounts on apartment sales at four of Brisbane-based developer Metro Property Development’s Brisbane CBD projects as the apartment market continues to face headwinds.
Along with 20 per cent discounts on one and two-bedroom apartments, buyers were being offered a 4.5 per cent rental one-year guarantee at Aqua Newstead, Broadway on Ann, Canterbury Towers, and Newstead Towers. These apply to apartments priced between low $400,000 to nearly $600,000.
The oversupply problem in Brisbane is heating up, with the Queensland Treasury now warning its apartment market could take a turn for the worse, especially if the bigger Sydney and Melbourne markets begin to falter.
But Metro said the discounts applied only to residual stock, not entire projects or launch prices, with residual discounting being part of a business-as-usual stock clearance.
“The heat has certainly come out of the Brisbane market from where it was a couple of years ago, but we see it as just back to normal market conditions with good buying opportunities and plenty of growth potential in the coming years to buyers entering the market now.
“We have already secured buyers for the four buildings and are in the run up to settling the last of these units over the next couple of months.”
He said discounts were sometimes offered by agents on their own accord, hoping developers would accept the lower prices.
“We see this all the time, however I can confirm there is no discounting to our [original] price lists and we have been successful in maintaining pricing levels thanks to the locations, amenity, inclusions and designs offered in the apartment projects we have been selling,” Mr Leahy said.
Discounts aside, a 4.5 per cent rental guarantee was reasonable and agrees with SQM Research’s data which show the latest rental yield for two-bedroom units in Brisbane was close to 5 per cent.
“We are taking an average of 18 days from handover to secure a tenant via our in-house rental team. Given this strong demand, we do offer a one-year rent guarantee to investors,” Mr Leahy added.
“We are having excellent success getting investors from both Melbourne and Sydney to look at Brisbane as a more affordable investment option than the other wo capitals vis-à-vis lower purchase prices with high rental yields.”
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