For over two decades, George Verdolaga has been helping property owners give their homes a visual oomph.

With his long experience as a Vancouver interior designer, Verdolaga has observed closely how the real-estate market has evolved.

Hence, the principal of the FlowForm Design Group speaks with a level of expertise about many issues.

When asked about house flipping, he says that it's now largely dead, except for people with really deep pockets or those who are professional builders.

“Fifteen to 20 years ago, it was an aspirational thing for the middle class,” Verdolaga told the Straight in a phone interview.

House flipping used to attract what he described as the “hobbyist”, ordinary folks who simply wanted to climb the property ladder.

“The idea for the part-time flipper was, ‘I buy a house, use it, do changes, put it back on the market, then I buy a new house after three to five years’,” Verdolaga explained.

Typically the climb starts with a one-bedroom condo. Then the owner upgrades to successively bigger properties, culminating in a detached home.

“This process usually unfolds between 10 to 20 years, and has been the hallowed route of any potential property owner wanting to get their foot into the property market,” Verdolaga said.

Also back then, house flipping didn’t have a bad name. It’s different nowadays.

“You’re reviled because people think, ‘Oh, you’re worsening prices’,” Verdolaga said.

More important, the economics has changed.

Verdolaga said that the hot housing market has killed house flipping as an option for many.

“House flipping used to be something that a lot of ordinary folk could aspire to,” he recalled.

To illustrate, Verdolaga noted that if a detached house in East Vancouver cost $400,000 in 2003, a five percent down payment of $20,000 puts someone in the “game”.

“You could actually find some good deals then, and competitive bidding wasn’t too much of an issue like it is now,” he said.

These days, Verdolaga said that one has to contend with more expensive properties to begin with, multiple-bid situations, a higher downpayment that banks require, and a “really tough mortgage stress test that never used to exist”.

“Keep in mind that unaffordability isn’t exclusively a Vancouver problem,” he said.

Verdolaga noted that it’s a global issue, and real estate goes up six percent or more a year, “especially in highly desirable coastal cities where people most want to live and work”.

He added that in Vancouver, real-estate appreciation can sometimes be as high as 9.5 percent annually.

“Remember that salaries go up only two percent or more a year on average,” the FlowForm Design Group principal explained.

Note the four percent difference between yearly salary increases and annual real-estate appreciation. Because of this, Verdolaga said that even a household bringing in $120,000 in combined income will find it challenging to buy a $735,000 condo, which he said is the price of a newly built 598-square-foot apartment that he recently saw near Vancouver’s Olympic Village.

“Especially if you’re required to put up a 20 percent downpayment that the bank asks for, which would be $147,000 in this case, as opposed to buying a $240,000 condo and only putting in five percent or $12,000 back then, which that same new-build condo would have cost new 20 years ago compounded at six percent per annum,” he said.

With the middle class already shut out mostly from the flipping game, Verdolaga said that only the rich and established builders are left.

“Nowadays, people just do home improvements that increase resale value of their home so that if they decide to sell their house in one, five, or 10 years from now, they can do that without any problem and without their home looking too dated,” he said.

This is where Verdolaga’s expertise comes in.

“What makes me unique is that I project manage home renovations myself, from redecorating clients’ spaces with new furniture to hiring the necessary tradespeople,” he said.

Verdolaga added that he also advises customers “not to over-customize their homes as they are usually renovating for three parties”.

Those would be themselves, a potential renter, or a future buyer.

Verdolaga noted that Canadians, especially folks in Vancouver and Toronto, “seem to be a little more obsessed than most people anywhere about real estate, and they usually renovate within one to five years”.

“They call an interior designer like me to help them make changes to their kitchen or bathroom, typically, or their entire space to increase their net worth,” he said.

Having heard all that, can the middle class return to the game of house flipping?

“If you’d like to, then you may want to target the high-end market, where buyers are less sensitive to price and there’s less competition with other house flippers,” Verdolaga said.

He explained that buyers in this spectrum of the market tend to go after a specific type of neighbourhood, a certain square footage, a particular style of architecture, and higher quality of renovation.

“These people are willing to spend a bit more. But this is a smaller market to go after so your house may not sell as quickly as you planned, which can make it a nerve-wracking and riskier endeavour,” Verdolaga said.