Frequent flipping a myth

Reports of property flipping, particularly in Auckland, are rife and tend to be used as an example of typical investor behaviour.

But it turns out the practice of flipping – where by a property is sold multiple times, each time for a significantly increased price each time – is much less common than many believe.

According to new online property data service myvalocity, the prevalence of flipping in the Auckland market remains low and has not climbed as the market has heated up.

At this point in 2016, 3.99% of property sales in the Auckland market were due to flipping.

This is slightly up on the 3.43% of sales involving flipping last year, but down on the 4.88% figure recorded in 2013.

However, in Auckland areas popular with investors – eg: South Auckland and other up and coming areas on the fringes of the city – over 12% of sales were due to the flipping of properties. 

Speaking in a panel discussion at the launch of myvalocity yesterday, founder Carmen Vicelich said there are different definitions of flipping.

For example, it can be a way for new buyers to get into the market and move up the property ladder.

But when it comes to properties changing hands multiple times before being settled on, there is not as much flipping going on in the current market as there has been in the past, she said.

Fellow panellist Niell Sullivan, who is New Zealand’s Valuer General, agreed that flipping is not as pronounced a practice as people are led to believe.

Flipping is not necessarily bad as it leads to more sales and housing market activity, he said.

“It is also good for the country’s housing stock as it is being improved. Where as in the past, New Zealanders had a tendency to just leave housing stock to weather and age.

“So flipping does have some positive off-shoots.”

Economist Shamubeel Eaquab, who was also on the panel, said there were bigger issues around property investing than flipping.

“Most of the money created in New Zealand goes into buying and selling houses rather than into new businesses and innovation.

“New Zealand’s obstacles with housing are not going away. But it’s less about flipping and more about housing being considered the only thing to invest in.”

Myvalocity is set to shake up New Zealand’s online property data market – which until now has been the sole province of QV.co.nz

The service will offer data-derived property insights, like those on property flipping, to the public, along with nationwide property valuation data and analytics.

Vicelich said the success of her company’s property data service for banks, Valocity, led to increasing requests from consumers’ wanting their own access to the data available.

This drove the creation of myvalocity, which aims to empower New Zealanders to make more informed decisions about property with the help of easily accessible, up-to-date and accurate data. 

Myvalocity users will be able to purchase automated valuation reports which feature the latest estimated value of a property, all the property details, sales history, and data on comparable properties sold.

The company’s property insights – which will include regular Property Trend reports and Suburban Insight reports - will be free, as will its provision of council rating valuations.

QV.co.nz offers similar valuation information, but at a slightly higher cost. It also charges for its provision of council rating valuations.

Vicelich said myvalocity was part of a digital transformation in the provision of data to those buying and selling property.

“Just like all of the recent successful global innovation in digital today, we’re putting the customer at the heart. That is where the world is going and that is where we are leading the way.”