The Block Vaucluse apartment sale

The Block Vaucluse apartment sale
The Block Vaucluse apartment sale

A Vaucluse apartment sold in The Block, the Channel Nine reality television series in 2010, sold again last week.

Five years ago it fetched $970,000 after Cheryl and Brenton's renovation.

This week the 100 sqm apartment sold ahead of its scheduled auction at $1.42 million through Mark Meyer at LJ Levi, with its price reflecting a very healthy 8.25 annual growth.

Recent research suggests these Vaucluse vendors have done better than many other buyers of properties from The Block offerings over the past 12 years.

PRD Nationwide research manager Diaswati Mardiasmo looked at 10 resales since the initial series of The Block aired in 2003.

Dr Mardiasmo noted these properties were bought at auction for an average $57,750 or 7% per more than the median price in their suburbs.

But their resale only averaged $26,500 more than the median price.

Dr Mardiasmo said the rate of growth of The Block properties had failed to live up to initial promise.

“They made dollar value money because the price did go up - but in terms of the implicit value, they lost,” she said.

Dr Mardiasmo said her ­research indicated The Block was a “losing proposition” for buyers despite the properties being in premium suburbs, like Bondi Beach and Manly.

“For a show that has quite a following, it is quite surprising to see that a property once sold at The Block hasn’t either matched or even gained more value than the suburb median price growth,” she said.

“It seems once the media hype wore off, buyers became more cautious.”

Infact such has been the silly exuberance on display at most of the Block auctions, that some investors have sold at serious losses. 

The first loss was in 2005 with the resale of a two-bedroom Roscoe Street, Bondi Beach unit, decorated by Amity Dry and Phil Rankine, that had sold at $655,000 in the first 2003 series.

It fetched $550,000, yes a loss of $100,000 within two years.

Then another Bondi apartment resold with a small gain, initially under the gaze of the television cameras in 2003 at $747,000, then quietly offloaded at $765,000 in 2009.

Back in 2010 the rollercoaster nature of Sydney’s property market was evident when one of the Vaucluse four units failed to sell under the auction hammer.

It was Brenton and Chez's 4/107 New South Head Road property that failed to meet its $880,000 reserve, passed in at $865,000. 

Those potential 2010 buyers were initially advised the apartment would fetch more than $900,000. But the estimate was adjusted down to about $900,000 when the 2010 spring property market conditions tightened and auction clearance rates fell.

Something like the current 2015 spring conditions.

Ofcourse Channel 9 never intended The Block to be a program focusing on the state of real estate market. 

Indeed Channel 9's auction selling price is not really a major priority.

They are about providing entertainment and drama - and securing their huge advertising revenue.

This is not to say over the years The Block hasn't served to highlight it’s not that easy to get rich quick from renovation and flipping.

Soon whole floor apartments in their latest series, in the South Yarra Blocktagonal complex, will be auctioned off.

These auction listings will attract thousands to the open for inspections. And possibly bidding silliness.

There is drama at every auction, every Saturday.

Don’t distress if you miss out this weekend because someone paid more. They might have to live with the consequences.

But use the knowledge gathered to help assess other property on the market, and feel assured you’ll be better prepared next time.

Remember building wealth from property only safely works when incorporated into a long-term plan.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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