The Block shows reality of property market

August 25, 2011, 10:14 amYahoo7

The contestants of The Block were left to learn the hard way that the real estate market in 2011 isn't following the script.

The remaining two properties from reality TV show The Block have finally sold, with Rod and Tania’s property fetching $922,000 and Josh and Jenna’s going for a cool $1 million dollars.

In the show’s finale, 3 of the 4 properties failed to sell at auction and deflated contestants publicly vented their frustrations. They had put 8 weeks of back-breaking work into their renovations and had come away with nothing.

While this latest season of The Block may have been a reality check for its contestants, it could be just the thing first homebuyers needed to keep their dream alive.

Local finance expert, Noel Whittacker, suggests that one reason The Blocks properties were hard to sell at auction was because ‘at the moment the markets are scary. I mean the property market is down, so you've got scary headlines,’ he said.

‘The banks are having trouble lending money so they are very keen to get your business. It is never a bad time to make a good investment, and with property you make your profit the day you buy,” Whittacker said.

The softening of the property market, particularly in eastern states, means while sellers are being blocked, for most the great Australian dream of buying a home is well and truly up for grabs.

Buyers’ advocate Christopher Koran is another expert who believes more people should be taking advantage of a softening housing market. ‘People are in a much better position than they think at the moment,’ he said.

‘You only have to look at the retail environment at the moment. People are holding back, they're not buying, and that does apply to real estate as well. It’s the confidence. And that's something buyers, and not just the market, need. Be prepared to be a hard negotiator. If there is a price that it is offered at, it is not necessarily the price it is going to sell for,’ Koran advised.

The Block’s cold hard stats

Nov 2010: The producers behind The Block buy 4 Victorian and Edwardian terraces in a row for $3.6 million dollars. They pay a further $198,000 stamp duty on the 4 properties.

As a result, the producer’s paid roughly $950,000 per terrace before even a lick of paint was added by The Block contestants.

June/July/August 2011: Contestants were paid $700 per person, per week for each of the eight weeks they lived and worked on set, and had grocery vouchers to cover food expenses. Total spend estimated at $50,000.

Renovations: Each couple spent more than $100,000 renovating their properties.

Second Stories Added: The three single-fronted homes had a second storey added by the producers at a cost of around $200,000.

Estimated Total Spend: $4.448 million

August 2011: Properties are sold separately for:

Polly and Woz (at auction): $855,000

Amie and Katrina: $860,000

Rod and Tania: $922,000

Josh and Jenna: $1,000,000

Total Sale Value: $3.637 million

Sidenote: In 1977, a couple paid just $24,500 for two of the terraces.

For an easier way to make money, get a high rate savings account. Up to 6% p.a. , paid monthly, no fees, at Yahoo7 Moneyhound

This information was brought to you by

Savings Account Finder

  • Account type