A Mount Maunganui property which sold twice within five months made a gross profit of half a million dollars for a Bay of Plenty couple.
This property was one of nearly 100 in the Western Bay of Plenty that was "flipped" for profit within a 12-month period.
The man who flipped the property, and did not wish to be named, said the apartment on The Mall had a considerable amount of time and money spent on it.
"We did a total renovation of the apartment and completely stripped it back to its bare bones," the former owner said.
The property was bought in June 2017 for $2.2m and sold in November 2017 for $2.7m, a gross profit of $500,000 in five months.
He said the property was sold at auction in November and the timing of the sale was "impeccable".
This practice, called "flipping", was loosely defined as properties selling twice or more within a single year for profit.
Flipping can mean buying a property and doing it up, or sitting on it for a relatively short time until the market is more favourable and then selling it on.
In 2017, 94 properties were resold for a profit after being held for less than 12 months, according to CoreLogic data released to the Bay of Plenty Times Weekend.
Thirty-one of those sales made less than $50,000 gross profit, 31 made between $50,000 to $100,000 and 32 properties made more than $100,000 gross profit.
These sales made up 2.7 per cent of all house sales in 2017 which was a decrease on the 4 per cent of all house sales that were flipped in 2016.
In 2016, a Tauranga house that sold twice within one month for a profit of $70,000 was one of the 214 houses that were flipped that year.
CoreLogic senior research analyst Nick Goodall said flipping was far less common in the region compared to the mid-2000s when up to 10 per cent of sales each year were properties held for less than 12 months.
"The occurrences of flipping in Tauranga and Western Bay, like the rest of the country, has reduced as the property market and capital gains has slowed."
Goodall said the reduction in houses being flipped was to do with the introduction of the brightline test late in 2015.
The brightline test applied to properties bought and sold within two years and was to help determine if the gains on the sale of a property were taxable.
Property investor and Rent Pro manager Dan Keller said he was not surprised the act of flipping had decreased in Tauranga.
"It is much harder to do this because not many people can afford prices over $2m ," he said.
Keller said most vendors were aware flipping was possible so it was important to do your homework when thinking about selling.
By the numbers
• 94 properties resold for a profit in 2017 after being held for less than 12 months
• This represents 2.7% of all sales in 2017
• 19 were in Papamoa Beach
• 14 were in Mount Maunganui
• 7 were in Greerton
• 5 were in Gate Pa
• 5 were in Welcome Bay
• 7 were held for less than 3 months
• 14 were held between 3-6 months
• 73 were held between 6 and 12 months
• 31 made less than $50,000
• 31 made between $50,000 and $100,000
• 32 made more than $100,000
• 42 were sold for between $400,000 and $600,000
• 24 were sold for between $600,000 and $800,000