“For units and apartments around the country, more commonly the purview of younger buyers and investors, the average holding period has been typically somewhat shorter. Mr Peleg said while most nominal losses recorded in the statistics fall under new property purchases that have depreciated over time, it can also often refer to fast resales.

“Recently due to low stock levels owners have feared being unable to execute a suitable move, and the average holding period for houses is now more than a decade across most parts of Australia.”ĭoron Peleg, CEO of Riskwise Property Research These costs are acquired during purchase and sale and can include stamp duty and agent’s fees, making property resale an expensive venture.Īccording to Mr Peleg, 5 to 10% of properties are sold for a nominal loss despite the average duration of property ownership trending upwards. Transaction costs emptying walletsĬEO of Riskwise Property Research Doron Peleg said one such risk associated with renovating to sell is transaction costs. “Real estate is a local asset, and buyers need to follow a systematic process when buying, ensuring they cover off all of the required due diligence,” he said. Mr Wargent remained confident in the value of technology and algorithms in assisting buyers in choosing areas to buy into and obtaining property valuations, but maintains that purchasing property is a more complex process.

as speculators have turned to online apps and algorithms to help them flip properties quickly, hopeful of a quick profit, but shortcomings in the models and processes have seen many come unstuck.” “The media headlines have reported such trends lately in the U.S. However, Mr Wargent warns buyers to be mindful of the risks associated with flipping a property during a hot market, including high costs of trade work and materials. Pete Wargent, co-founder of BuyersBuyers, said buyers tend to pursue fast gains during the market cycle peak and expects the trend to continue in the current peak.

Buyers should act with due diligence, says Pete WargentĪs the property market continues to go from strength-to-strength, buyers are cautioned against buying to flip under the guise of making a quick buck.Houses favoured over units due to scarcity value.Transaction expenses and price deceleration increase risk of loss in short term resales.

House flipper buyers