Flipping Out on Flippers: A Myth Worth Busting

By Murtaza Haider

For years, flippers—those who buy homes to resell them quickly—have been cast as villains in Canada’s housing affordability crisis. Add them to the list of usual suspects: foreigners, speculators, and investors, all blamed for driving prices sky-high. However, new data from Statistics Canada suggests that this narrative doesn’t hold water, at least not in British Columbia, where the veil on flipping has been lifted.

Here’s the headline: only three percent of homes sold in B.C. were “flipped,” meaning resold within a year of purchase. And those flipping these properties weren’t exactly raking in ill-gotten profits. When transaction costs, taxes, and renovation expenses are factored in, many flippers may not have made much at all—some likely lost money.

Yet policymakers bought the myth wholesale. Since January 1, 2023, profits from residential properties sold in under a year are taxed as business income in Canada. B.C. is doubling down with a provincial flipping tax starting in 2025. But before the government sharpens its regulatory sword, it should examine whether flipping is even a big enough problem to justify such interventions.

Here’s the headline: only three percent of homes sold in B.C. were “flipped,” meaning resold within a year of purchase.

The Data Doesn’t Lie

Statistics Canada’s findings make it clear: flipping is a marginal activity. In urban areas like Vancouver, where flipping is more common, only 3.2 percent of homes were resold within a year in 2021. Condominiums were the most frequently flipped, at four percent, but single-detached homes lagged at just 2.8 percent.

The median purchase price for homes flipped in 2020 was $565,000—noticeably less than the $610,000 median for other purchases. Flippers often target undervalued properties, investing sweat equity or renovations to create resale value. But this isn’t the “fix-and-flip” bonanza glorified by reality TV.

Let’s stop flipping out over flippers and focus on the real problem: Canada’s chronic housing shortage. Only then can we hope to tame the dragon of housing unaffordability.

Even the financial gains from flipping are far from jaw-dropping. Statistics Canada reports a 20.3 percent “gross profit” on flipped properties sold in 2021, which creates a false sense of exclusive wealth generation by flippers. Gross profits exclude hefty transaction costs—brokerage fees, taxes, and renovation costs—not to mention the rising cost of labour and materials. After accounting for these expenses, many flippers’ returns shrink significantly, and some may dip into the red.

Moreover, flippers’ returns barely outpaced general market gains. From 2020 to 2021, the median price of all B.C. homes rose 18 percent. That leaves flippers with an economic profit—a gain beyond normal market appreciation—of just 2.3 percentage points.

Canada Isn’t the U.S.

Contrast that with the U.S. housing boom before the Great Recession. Research published in the Journal of Real Estate Finance and Economics found that annualized returns on flipped properties reached 60 percent during the peak, with adjusted economic profits north of 20 percent. Those kinds of gains may necessitate intervention to prevent market volatility.

But Canada isn’t the U.S., and flipping isn’t a systemic threat here. A two-percentage-point economic profit isn’t inflating prices or driving volatility. Instead, flipping seems more like a byproduct of already rapid price growth than a cause.

The Real Culprit

This isn’t the first time we’ve rushed to blame housing woes on a scapegoat. Immigrants, foreign buyers, speculators—these groups have all been accused of fuelling Canada’s affordability crisis, only to be exonerated by data. Now it’s the flippers’ turn.

The glaring mismatch between supply and demand is the real driver of Canada’s housing challenges. We aren’t building enough homes to meet our population’s needs, and no amount of flipping taxes will change that. If we’re serious about tackling affordability, we must build—and build big.

Let’s stop flipping out over flippers and focus on the real problem: Canada’s chronic housing shortage. Only then can we hope to tame the dragon of housing unaffordability.

Murtaza Haider, PhD. is the Director of the Urban Analytics Institute at the Ted Rogers School of Management at the Toronto Metropolitan University. He is also the Associate Dean of Graduate Programs.