The Block 2012 followed the golden rule of real estate, although the Melbourne market was weaker
Kudos to the team at Channel 9’s The Block, with series 2012 resurrecting renovation reality television from that great big tip of consumer ratings demolition. It was indeed a brave and costly decision for the 9 network to raise the tools again following last year’s dismal failure (season four). The huge mistakes made in season four (primarily wrong location) were reflected in lacklustre auction results resulting in the show’s foundations collapsing before the viewers’ very eyes.
Following the trainwreck finish to season four I wrote Lack of experience, research and planning a problem with reno TV: “Whenever I have watched reality shows what resonates most with me is an obvious lack of due diligence. How can you have an advertising campaign that any other vendor in Australia would dream of only to see failure and disappointment on auction day?”
Season five went for the golden rule of real estate – position, position, position, resulting in a trendier South Melbourne with no better formula than four double-storey terrace homes. A ratings bonanza, given The Block filled the top three Sunday night rating spots:
Winner announcement 2,715,000
Grand finale 2,145,000
Season four was a classic example of get the location wrong and disaster will quickly follow, as was evidenced in the contestant’s financial rewards:
Josh and Jenna: $50,000
Polly and Waz: $15,000 + $100,000 winner’s prize money
Amie and Katrina: $0
Rod and Tania: $72,000
Season five was laid on much stronger foundations with an eclectic mix of would-be home renovators (some paint brush virgins), which added to the show’s intrigue. Nonetheless it made for great viewing, and that is what the ethos of the show is all about – viewer bums on couches.
In all fairness the Melbourne property market is in all probability weaker in season five than in season four, yet the end results were vastly different.
Lara and Brad: $506,000 + $100,000 winner’s prize money
Dani and Dan: $448,000
Sophie and Dale: $355,000
Mike and Andrew: $434,001.01
This was not a case of timing, rather identifying a location that attracts mass consumer appeal – we also observed for the first time prospective under-bidders moving from one property (when sold) to the next property, which is almost unheard of.
The moral of the story is you get what you pay for, and season four contestants would be feeling somewhat annoyed that buyers won’t pay premium prices for real estate that is not in the right location – no matter how great the final product.
Having said that, for all those wannabe pseudo up-and-coming property developers all the properties in seasons four and five were sold for well below replacement values, which is sometimes construed as market value. Replacement and market values are two vastly different commodities that bear no resemblance – more particularly if you are funding both (which is not the case with The Block.)
The Block represents excellent market value for Channel 9 however, for those planning their very own renovation extravaganzas there are no silver linings. Real estate is long term, not short term, that’s the long and the short of it.
There will be two series of The Block in 2013 – and the 9 network has well and truly strengthened the show’s foundations. Let’s hope that when the producers learnt to position the show as a ratings winner, this very same formula also applies to the properties’ addresses.
Otherwise it will be season four all over again.
Robert Simeon is a director of Richardson Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. He has also been writing real estate blog Virtual Realty News since 2000. The RWM real estate model has sold in excess of $1 billion in database sales globally.Property Observer readers can download a free ebook on renovation and reality television.
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