CRICKET legend Shane Warne has delivered a different kind of flipper.
The former test bowler has profited handsomely from flipping his Melbourne home after just 20 months ownership.
It was the heritage Brighton trophy home he bought in 2016 for $14.2 million and sold last month for a reputed $20 million.
The spin king’s off market sale was flipping at its best.
Flipping is a popular term used to describe short-term property trading. Perhaps Warne didn’t have the intent of reselling the property in a short time frame for a profit but he certainly knew where and how to ride the capital growth curve.
The Brighton Warne flipped.
It’s not possible to confirm the before and after, but it doesn’t appear he spent much adding value to the property second time around.
That was done when he owned Melville the first time, paying $3.6 million in 2000, then spending that amount again on a major renovation and extension, and selling the matrimonial home in 2007 for $8.8 million.
Property analysts CoreLogic, which now produce a flipping report, found flipping most prevalent in Sydney and Melbourne.
Across Sydney, 6.8 per cent of all property resales over the past year were flips between one and two 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.
Although values have been rising there had not been an accompanying substantial increase in flipping behaviour. Certainly not like the rise witnessed during the early 2000s housing boom.
The home sold for a figure said to be around the $20 million mark.
But when Sydney vendors do flip, they are in most instances flipping for a profit. In Sydney, only 5.7 per cent of flips within one to two years of purchase were at a loss, compared to 37 per cent a decade or so ago.
At close to 95 per cent, regional NSW last year recorded the highest percentage of flips at a profit within one to two years of purchase, followed by Sydney (94 per cent) and Melbourne (93 per cent). The national average was 89 per cent.
Shane Warne owned the property for just 20 months.
Interestingly it was the Illawarra region that experienced the highest level of flips in NSW — 8.7 per cent of resales — along with the highest annual increase in flipping — and Illawarra was among the most profitable regions in NSW, with only around 2 per cent of properties flipped at a loss.
The NSW Southern Highlands and Shoalhaven regions also saw profits, actually recording no losses for flips less than a year, and just 0.9 per cent from one to two years.
In order to make a profit, flippers need to recoup their transactional costs including stamp duty, conveyancing, the marketing and real estate agent commission.
Vendors in Perth, Hobart, Darwin, and the regions of SA, WA, Tasmania and the NT were the most likely to flip for a loss, given value growth has been sluggish for a number of years. In the case of Hobart, that may begin to change in time — the median price of a home in that city jumped 13.1 per cent over the past year.
POSTED: March 9, 2018
AUTHOR: Jonathan Chancellor
@Jurds Real Estate – Cessnock and Hunter Valley Wine Country Property Experts – the place to buy, sell and lease property in Cessnock and the Hunter Region.