Feb 20, 2026
Flipping houses might look like a smart and engrossing way to turn a profit, but it’s become a much riskier game — especially in today’s market.
While success stories might lure some people into the business, other, more steely-eyed individuals get hooked on the idea of building wealth hands-on, one renovation at a time.
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But real-world house flipping is tougher than what you’ve heard — or watched unfold on popular home-improvement shows.
According to Coldwell Banker, house flipping stayed surprisingly active through 2024 (1). In the year’s second quarter, approximately 2.42% of homes sold in Canada were flipped — meaning they were bought and resold within 12 months. That’s only slightly below the record high of 2.61% seen in early 2023.
Of course, there are the profits. Coldwell Banker reports that flippers showed resilience in 2024, adapting to market conditions despite rising interest rates and affordability pressures (2). However, returns on investment have declined from earlier highs, with investors facing tighter margins.
So what squeezes the profits out of house flipping? The answer lies in a perfect strom of rising costs hitting flippers from all directions.
A tougher market makes for less profit
People in the house-flipping game are facing more challenging circumstances. While mortgage rates climbed sharply starting in 2022, the current average five-year fixed mortgage rate currently sits around 3.75% (3). Many forecasters expect rates to hold steady through 2026 at approximately 2.25% for the Bank of Canada’s policy rate.
Of course, there are likely other hurdles house that many will face when securing financing. Specialty lenders that house flippers often rely on have become more selective about who they’ll back.
On top of financing challenges, flippers face rising costs everywhere else. Home insurance prices have exploded, with 2024 marking the most expensive year on record for insurance payouts in Canada to the tune of $8.55 billion (4). This has caused rates to spike 5.28% in 2025, with Alberta alone seeing a 9.07% increase year-over-year (5). These insurance hikes mean higher carrying costs for flippers, and eat directly into those already-tightening profit margins.
Additionally, inflation and supply chain issues have substantially raised the value of building materials. Statistics Canada reported that in Q3 2024, construction costs for residential buildings rose 4% year-over-year in the 15 largest census metropolitan areas of the country (6).
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Flippers also face stiff competition when buying properties. While Canada’s foreign buyer ban — extended to January 1, 2027 — has restricted nonresident purchases, institutional investors and domestic buyers have filled the void (7). Though the volume of house-flipping transactions remained near record highs in 2024 at 2.42% of all sales, finding properties that yield strong returns has become harder as the market cools and competition intensifies (8).
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Get StartedThings to think about before flipping
For would-be house flippers, the big questions include:
- Do you have access to enough startup capital?
- Have you calculated potential cost overruns?
- Can you afford to keep a home on the market for an extended period?
- What’s your overall risk tolerance?
Also think about whether you’re able to manage the ups and downs of the market. Can your house-flipping business survive if you can’t sell for six months, a year, or longer?
Some property flippers take a flexible approach when a home doesn’t sell for break-even or profit. Instead of accepting a loss, they may choose to hold the property and rent it out, allowing time for market appreciation before listing it again.
It’s also important to consider trends in the areas where you plan to buy and sell. The scope and style of renovations often depend on whether a neighbourhood skews higher- or lower-income. Understanding your local market — and the trends shaping it — can make a significant difference in how much profit you ultimately earn.
Bottom line
House flipping in Canada remains active, but the game has gotten tougher. Mortgage rates around 3.74% for five-year fixed terms, home insurance cost increases due to record payouts, and rising construction labour and materials costs all squeeze profit margins.
Before jumping in, make sure you have enough startup capital to cover cost overruns, can afford to hold a property if it doesn’t sell quickly in a slumped market, and truly understand your market trends. The most successful flippers know their numbers cold and have backup plans — like renting out properties — if sales stagnate.
— with files from Melanie Huddart
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Coldwell Banker (1,2); Homeowners Alliance (3); Insurance Bureau of Canada (4); Insurance Institute (5); Zoocasa (6); Government of Canada (7); Financial Post (8)
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Rebecca Payne has more than a decade of experience editing and producing both local and national daily newspapers. She's worked on the Toronto Star, the Globe and Mail, Metro, Canada's National Observer, the Virginian-Pilot and Daily Press.
