More than 14,000 homes flipped within six months during property market boom

More than 14,000 New Zealand homes were flipped within six months of purchase during the last property market boom.

But that represented less than 3 per cent of total sales, new research by OneRoof shows.

National and Labour politicians blamed "flippers" for pushing up house prices, and introduced legislation to quash property speculation.

But data published in today's OneRoof Property Report shows house-flipping in New Zealand was not as prevalent as popularly believed.

Of the 647,133 homes sold between 2013 and 2018, OneRoof and its data partner Valocity identified 14,588 that were bought and then resold within six months.

In Auckland, of the 193,698 properties sold between 2013 and 2018, 6631 (3.4 per cent) were flipped within six months.

"Multiple flipping of properties was also rare," OneRoof editor Owen Vaughan said.

"Our research found that just 2480 homes were bought and resold three times or more during the boom.

"The biggest group buying and reselling - 56 per cent - was single homeowners, and investors with three or more properties accounted for 44 per cent of resales."

The research showed that, between 2013 and 2018, 25 per cent of residential sales (165,098) were bought and then resold within five years. The median holding period for houses in New Zealand since the year 2000 is 3.45 years, and 9 per cent of those resale properties were flipped with six months.

According to the data, the "flip capital" of the country was not Auckland, but Wellington.
Fourteen per cent of total resales (properties bought and resold within five years) in the capital between 2013 and 2018 were within six months. In Auckland, the figure was 12 per cent. Six-month flipping in Hamilton and Tauranga sat at the national average of 9 per cent.

single-homeowners moving up the property ladder."Wellington house prices didn't start rising until late in the cycle, but buyers had been exposed to years of headlines about people leaving it too late and missing out."So when prices did move, people didn't wait to move up the next rung in the ladder. Unlike in Auckland, the leap to a bigger home wasn't as large."

Valocity valuation director James Wilson said nationally, the average gain on resale properties was $155,000.In Auckland, where property values have risen 45 per cent since 2013, the difference between initial sale prices and the resale prices varied from 21 per cent in Franklin to 25 per cent in the Central City and 26 per cent in Waitakere.

In Hamilton the difference was 22 per cent, and in Tauranga it was 21 per cent. The difference dropped to 14 per cent in Christchurch, 12 per cent in Invercargill and 11 per cent in Gisborne.

Wilson said the data raised questions about the National Government's decision to introduce the bright test in 2015, which taxed gain on non-family homes bought and sold within two years.

The policy targeted speculators and was extended to five years by Labour last year.

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Former Property Institute CEO and OneRoof property commentator Ashley Church said the bright line test was unnecessary as professional resellers already paid tax on their gains and investors were taxed on rental income.

"To label investors as 'speculators' is wrong," he said. "Property investors provide an important and tangible public service [as landlords] yet the Government seems to be doing everything it can to get investors out of the market and discouraging others from entering it."

Housing and Urban Development Minister Phil Twyford said the Government needed responsible property investors who were committed to providing high quality, long-term service to tenants, rather than making a "quick buck".

"A number of our policy changes have been designed to prevent a repeat of the destructive speculative frenzy that saw house prices double and the worst homelessness in generations."