Tuesday, 6 September 2011

"The Block" not sold at Auction

source: www.domain.com.au

The Block ... that's reality
article Carolyn Boyd is a property journalist and keen follower of Australia’s housing market.



The Block ... that's reality
Article Carolyn Boyd is a property journalist and keen follower of Australia’s housing market.

When three out of four auctions failed to get away on the weekend at THAT Richmond street where a fair chunk of the nation has been watching four dilapidated homes being transformed, many blamed the auctioneers.

Others scoffed that given the production company forked out heftily to secure four houses side by side that "owed" the TV makers about $950,000 each, the whole exercise was a failure.
But welcome to reality. A place where renovations don't necessarily make you a motza, especially in a slow market, and where what you pay in the beginning is as important as how much you sink into the renos, and the price you sell for. If you're brave enough to take on the renovate-to-profit game at the moment.

Of course, for television companies, they aren't out to make money on real estate – or not on the direct selling of it anyway. They are a mere vehicle to gather up those all-important eyeballs, and on that measure The Block hit gold.

The other reality is auction campaigns aren't always about making the sale under the hammer. They are a marketing vehicle, just like pamphlets, ads in the paper or on the web, and open houses.

Auctions create excitement, set a sales deadline and hopefully draw a deal.

Many of the auction clearances reported in each weekend's auctions are actually sold prior or sometimes sold after – showing there were some negotiations post-auction.
Away from the auctioneer's shrill tones and the pressure of the bidding floor, a buyer was more comfortable signing on the line.

The Block didn't have all the levers of an auction campaign available to it because when you're making TV, you can't really sell prior. That would clearly resolve the auction tension a little too early.
If you are wondering if The Block was "reality", two houses actually did sell on the night – Polly and Waz's, who sealed winning $115k with an on-screen smooch – and that of the bitterly disappointed sisters Katrina Chambers and Amie Godde, whose home sold after the hammer fell, for its reserve of $860,000.

If you were to see The Block sales in auction results, they probably would show up as a clearance rate of 50 per cent, not that far from Melbourne's 60 per cent clearance on the weekend, according to the Real Estate Institute of Victoria. That compares to 56 per cent two weekends ago, and 73 per cent the same weekend last year.

If anything The Block showed exactly what's happening in the market at the moment. Buyer interest does exist – at the right price.

However, armed with information both about properties in the area and what's happening in the broader economic world, buyers are educated, and cautious. And, as a nation, we're all much more aware of taking on too much debt these days, so have really reined spending in.
You couldn't help thinking the producers must have been breathing a sigh of relief that they'd managed to sell at least one home under the hammer.

Now, with the latest update that Rod and Tania have sold their house for $922,000, $72,000 over their reserve, and Josh and Jenna's bigger property has been picked up for $1 million, it's a case of four out of four gone.

The big question for lovers of The Block perhaps revolves around what's next. As the screen credits began to roll, Scott Cam promised they'd be back next year.
But with the property market not expected to go anywhere fast, anytime soon, will this be a reality? Three million sets of eyeballs might just mean, that whatever the state of the market, we will indeed be seeing another round.


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