Property Flips Now Dangerous
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What is the main topic of property flipping discussed in this episode?
It's The Real Estate Podcast, brought to you by Ray White, the largest real estate and property group in Australasia. And welcome to another episode of The Real Estate Podcast, available on iHeartRadio and also Spotify and Apple Podcasts or wherever you get your podcasts from. And welcome to Thursday the 21st of April for 2022 and coming up in just a moment we're going to be talking about the cooling market and the viability in risk and in the numbers of doing a flip on a property and the exposure for people doing this being caught out. But first let's take a look at the weather. It's the main centre forecast with propertybuyer.com.au. And Sydney expecting a shower or two developing today with a high of 23 degrees.
Melbourne cloudy but mainly dry and 17. Brisbane expecting a fine one with some cloud cover and 28 degrees. And in Perth expecting a mainly fine day and 28 degrees. We feature market updates, interviews and trends. It's your real estate podcast for breakfast. So what did you think of the debate last night between Morrison and Albanese? Did you learn anything that you didn't already know? Were you informed and enlightened, learning things that will help form your decision come voting time? Well, the firecracker debate, it was not.
How is the current property market affecting flippers?
One thing's for sure, though, I think that we will be hearing a lot more about the security around the Solomon Islands and China's influence in the region. The policy around that will go well past the election, but each party's clear signalling will be important with the run-up to voting day, which, of course, is getting very close. Saturday, May the 21st, it is just 5pm. Well, there's been some predictions around Sydney's cooling property housing market that it's created a bit of a headache and a concern for property buyers who have paid big and large amounts for properties in the hope of flipping them for a profit. Some commentators are saying that people who have paid these high property prices to speculate on could be in a bit of trouble.
Well, to discuss this further is James Elgar from Mortgage Choice. Good morning, James. Welcome to the Property Podcast. Good morning, Craig. Thank you for having me. Great to have you on. And yeah, it's a bit of a problem. A plan to speculate might not be as smooth sailing as a lot of these property flippers would like at the moment. The tide is definitely turning. We've seen clients looking to enter this space more of the lifestyle style.
What risks are associated with property flipping in a cooling market?
type approach, we're definitely seeing some of those people facing bigger challenges or not looking at such great returns given not just the prices they're paying, but that calling in the market. You know, it's almost like in every property cycle, you're kind of caught in this no man's land where, you know, it's starting to move and you can get people sort of caught right down in the crevasse of the shifting tide. And that kind of feels like where we are with this sort of subject of people paying for properties, trying to flip them and potentially just paying too much. Absolutely. I couldn't agree more. And look, there's no doubt there'll still be opportunities where perhaps sellers are nervous about the exact same situation in the market.
But those clients who have either committed earlier towards possibly earlier this year or back end of last year in the hope that the market would keep moving ahead are definitely facing some headwinds. And I guess as far as you're concerned, being in the mortgage game, I mean, you would have seen this for such a long period of time, James, you know, over the last couple of years. And you'd also be thinking, well, at some point, you know, this is going to change and it is going to have an effect. And you just hope that people sort of, I guess, pick the market correctly. You're absolutely right, Craig. So for the last two years, we've seen some of what I would term to be those professional property flippers, you know, slash small-time developers.
They've really started to slow down and back away from the market, not just in the last few months where it's much more apparent, but probably over the last 18, we've seen some of those clients having conversations now saying, hey, there's not enough value versus the risk, or
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Chapters
6 chapters
1
What is the main topic of property flipping discussed in this episode?
0:02–1:30
2
How is the current property market affecting flippers?
1:30–2:54
3
What risks are associated with property flipping in a cooling market?
2:54–4:57
4
How do professional flippers differ from casual investors?
4:57–6:39
5
What role do private equity loans play in property flipping?
6:39–8:08
6
What strategies can flippers use to mitigate risks?
8:08–9:13
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