FLIPPING GAME-EXPLAINED (PART 4)

The pre-selling arbitrage was never meant to last forever—and by 2017, the cracks began to show.

At first, it was subtle. A few missed resales here, some longer holding periods there. But the message was clear: the flipping model was under pressure, especially in the condo segment.

What Changed?

The short answer: affordability hit a ceiling.

When pre-selling condo prices pushed past P250,000 per sqm, savvy investors started crunching the numbers. To earn a reasonable return, they’d need to resell at over P300,000 per sqm by turnover.

The problem? Units in the secondary market—often in the same development—were trading for below P200,000 per sqm.

That price gap made flipping a much tougher sell.

Buyers were becoming smarter, more selective. Suddenly, the math wasn’t as easy. And worse, some flippers couldn’t even exit before turnover anymore. Their Plan A was no longer working.

The Warning Signs

The slowdown showed up in different ways:

1.⁠ ⁠Unsold inventory post-turnover

A number of condo towers reached completion, and yet developers still had unsold units—a red flag in what was once a hyper-competitive, undersupplied market.

2.⁠ ⁠Developers feeling the pinch

Resale units from early flippers—often priced lower—began competing directly with developers' own listings. To protect their margins, developers fought back:

+ Increased reassignment fees

+ Delayed or restricted the reassignment process

+ Imposed new internal rules on pre-turnover sales

+ Delayed title release (not sure if this was intentional)

3.⁠ ⁠Heavier discounts just to exit

Flippers, facing fewer buyers and tighter rules, had to offer 30%+ discounts from the developer’s current list price just to offload their units. It was no longer about profit—it was about breaking even.

The New Lifeline: Foreign Demand

But just as local demand began to wobble, a new wave of buyers entered the scene—foreign investors. This new demand helped prop up the flipping model—for a while...until the COVID pandemic hit.

But here’s the thing about patchwork solutions: they buy time, not sustainability.

Continued in the next post.