The Block 2012 auction result spoils the dire forecasts of property crash pundits
Melbourne’s property market has unquestionably deteriorated over the past year, but The Block 2012 has triumphed as more than just a television ratings success.
Being some $506,000 over the $1,114,000 reserve price, the Maitland couple took home the breathtaking $506,000 difference along with the game's $100,000 prize. With a pace-setting $1.62 million auction sale price, Brad and Lara's South Melbourne terrace kicked off the weekend's four auctions – and never looked liked getting beaten as The Block 2012's top seller.
Bettering the past four series – Bondi Beach, Manly, Vaucluse and Richmond – all four contestant couples won huge winnings – a collective $1.74 million – for their 10-week effort arising from Channel 9's ultra-cautious reserves given the prevailing Melbourne property market sentiment.
But with very keen bidding from numerous prospective buyers, plenty of investors left The Block without their desired Dorcas Street acquisition despite turning up at all four Saturday afternoon auctions.
The Block 2012 auction result spoilt the dire forecasts of property crash pundits, but only one of the four terraces actually sold at around its expenditure cost.From behind the 405 terrace's green door, Karl Gillon from Buxton Albert Park, which sold Channel 9 the four terraces for $3.8 million in 2010 – noted when bidding neared $1.6 million that "we are still at below cost."
It was the breadth of buyers who wanted a South Melbourne address that underpinned the prices, as opposed to the slightly trickier Richmond location. The buyers, who included neighbours, were tempted in after low reserves were mooted – and offered. There was also an ambush marketing presence from EnergyWatch's new boss, entrepreneur Danny Wallis, best known as founder of the information technology service provider DWS Limited.Based on disclosed sales of terraces in South Melbourne over the last two years, two-bedroom sales have averaged $1.13 million, three-bedroom terraces have averaged $1.3 million and one four-bedroom terrace sold for $1.8 million in April last year.
Brad and Lara's 405 Dorcas Street three bedroom terrace was the biggest offering of the four adjoining terraces at 158 square metres land. It was also the less adventurous fitout of the four.
The next best price was $1.44 million for Dan and Dani's at 407 Dorcas Street, which had a $992,000 reserve and meant the couple had a $448,000 take-home prize.
In third place, price wise, was 403 Dorcas Street, with Mike and Andy's offering fetching $1.4 million in the day's final auction. It had a $966,000 reserve, with the brothers taking $434,000 home in winnings.
The bookies' pre-auction favourite, Dale and Sophie, finished fourth with a $1.33 million sale price, which was $355,000 over its $975,000 reserve.
On Saturday, after the auctions, but before the Sunday night finale went to air, Property Observer noted the South Melbourne auctions were held behind security-enforced closed doors this afternoon, and remain officially unreported. But with a spoiler alert for Blockheads, Property Observer gleaned all four terraces found buyers.
Only Hockingstuart revealed it sold its listing at an undisclosed price on the REIV Saturday results website, the sole agency to break ranks. And by Sunday morning sold stickers were on the auction boards for two of the terraces. Melbourne agents secured an overall 59% success rate at its reported weekend auctions.
Without any confirmation – and plenty of trepidation given confidentiality clauses required from all attendees – the whispers suggested all four Dorcas Street terraces sold surprisingly well - for in excess of the timid $1 million plus price expectations that understandably cautious agents gave in the early days of the marketing campaigns.
It proved a remarkably successful lure in securing interested bidding parties, attracted also my the tax depreciation entitlements, who turned competitive during the auctions.
Based on the unconfirmed reports, the terrace prices averaged about $1.45 million.
At that, the prices are mildly reflective of current market values in the district, but a bit short of their overcapitalised works program that followed the initial pricey outlay that secured all four terrace at a $3.8 million cost.
The results will be a key market sentiment indicator, of significance far beyond its entertainment value, which is why Property Observer reports generally on the same-day results without going into the specifics of the reality television game outcome.
The overall prize winning couple is seemingly still a tightly kept secret, partly because it all depends on the reserve pricing, of which the dozens of auction attendees were typically uninformed. This series the auction reserves are even affected by price deductions arising from rewards from game results after challenges put to the contestests.
All contestant couples pocket the difference above the reserve prices and the winners get an extra $100,000. There was no sign any of the property carnage that accompanied last year’s Richmond auction. The Block’s 2011 airing – which ramped up the series to a remarkable six nights a week footage – ended with a dose of reality at its auction finale as three of the four listings failed to find bidders under the hammer.
But at one Dorcas Street auction the usual silence of opening bidders was instead accompanied by simultaneous bids from four parties, one attendee told Property Observer.
“Very cosy auctions in packed lounges,” one buyers’ agent tweeted.
Footpath observers noticed there was a caravan of investors moving jovially, but increasingly frustrated, between the four consecutive auctions, which kicked off around 2.15pm and ran until about 5pm Saturday afternoon.
An underbidder on one property reputedly snapped up the next offering.
Even bidders who were at the Richmond auction were back in attendance for the Dorcas Street offerings.
Buyers arriving for the next auction typically became aware of the previous comparable sale price in hushed conversations and so Channel 9’s containment hopes failed to keep the results to within the four walls. Although The Sunday Age kept mum on its inside knowledge having been permitted to attend the first auction, Brad and Lara's auction, whose house is the biggest of the four.
Forbidden from revealing the results – and indeed whether the property even sold – The Age television reporter Michael Lallo wrote on the Fairfax Media website: “it will make for compelling viewing.”
He reported it was Karl Gillon – from Buxton Albert Park, which sold Channel 9 the four terraces – who opened proceedings with the 405 Dorcas Street auction – and reportedly set about knocking the neighbouring three properties.
"We have real living zones," he said, "not those shoebox front rooms they call a living room.”
The Block tweeted its website had technical difficulties last night possibly given the desire of the high ratings audience to prematurely know the outcome.
It is expected there will be two series in 2012 - one series will be filmed with semis in Bondi above the more beachy location where The Block began in 2003 – and there are rumours of a second series as an Allstars version including former contestants.
Channel Nine is expecting huge ratings for the finale, which aired from 6:30pm Sunday night.
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