“The Block” houses for sale

Channel Nine’s mega-popular TV show “The Block” is nearing the end of its run, and the four properties are now on the market for you to check out and even wander through.  The auction date is Saturday August 20, so it’s going to be a fairly short and sweet marketing campaign.

Will they cover their costs of purchase?

Watercress Productions paid about $950,000 each for the dilapidated Victorian and Edwardian houses, and they expect to sell for somewhere between $800,000 and $1 million each.  Did they pay too much initially? Probably, but there was a reason:

“… Biggin Scott Richmond director Russell Cambridge, who is selling Polly and Waz’s property at 37 Cameron St, said Watercress paid above the market rate to secure four properties side by side in fashionable Richmond.”
– The Block 2011 houses set to make a loss

Ok, so that makes sense … but does it show that buying a property, doing a big reno and then trying to sell it a few months later is not the money spinner it used to be?  They would have to have paid just $550,000 to make a reasonable profit, and I’d say that it would be impossible to buy a block of land in Richmond for that price.

Wanna check them out?

Jenna and Josh:

 

View the property online: 37 Cameron Street, Richmond
Selling agent is Ruth Roberts from Woodards Camberwell.
Inspection times: Saturday or Sunday 10:00am to 1:00pm

Polly and Waz:

View the property online: 39 Cameron Street, Richmond
Selling agents are Russell Cambridge and Sam Davenport from Biggin & Scott Richmond.
Inspection times: Saturday 4:00pm to 5:00pm

Katrina and Amie:

View the property online: 41 Cameron Street, Richmond
Selling agents are Jodie McCarthy and Glen Coutinho from Hocking Stuart Richmond.
Inspection times: Saturday 2:30pm to 3:30pm and Sunday 10:00am to 1:00pm

Tania and Rod:

View the property online: 43 Cameron Street, Richmond
Selling agents are Clayton Smith and Allan Cove from Jellis Craig Richmond.
Inspection times: Saturday 2:30pm to 3:00pm and Sunday 10:00am to 1:00pm

A few points:

• The open for inspection times are often different. 41 and 43 Cameron Street have similar times, but the others are very different.  I would have coordinated the opens with other agents to maximise exposure across very similar properties in the same price bracket … but then I’m not a real estate agent, so perhaps there are good reasons for staggering the times.
• The properties have all been photographed in the early evening, which gives a very similar look.  However, they all seem to have used a different photographer, as the style of photography is slightly different. For example, Katrina and Amie’s place has been photographed with a lot of flash or tungsten light to really light up the exterior, but Jenna and Josh’s place has been shot using largely natural light.
• The homes were all initially advertised with a price range (even though they are going to auction) of $800,000 to $880,000, with Jenna and Josh’s place at 37 Cameron St looking at $900-990,000 (as it’s a larger property).  However, I see now that at least a couple of the properties are advertised as “Price on Application” … what changed?

 

Update – 12th August, 2011:

Last night Polly and Waz (aka “Bubba”) won “a massive advertising and marketing campaign in print and online for three weeks, worth $15,000”, provided by Domain.com.au.  What did that $15,000 campaign give them?  I thought it included a featured listing at Domain.com.au.  So I just did a search of homes for sale in Richmond, and their home at 39 Cameron Street didn’t come up in the search results until page 3, below all of the other homes.

Did that campaign primarily focus on newspaper advertising?  If anyone down in Melbourne can fill us in, that would be great. 🙂

 

Update – 21st August, 2011:

“Inspectors from Victoria’s consumer watchdog seized sales documents and advertising material from the offices of Hocking Stuart, Biggin & Scott, Woodards and Jellis Craig on Thursday.

The agents, who have all strongly denied any wrongdoing to the Sunday Herald Sun, face fines of close to $25,000 each if found guilty.”
– The Herald-Sun, “Block raided, investigated for underquoting”

However, the selling agents have defended their actions:

“Jellis Craig Richmond director Clayton Smith, who handled the sale of Rod and Tania’s house at 43 Cameron St, also denied under-quoting and said the homes were hard to price as estimates were done during the renovations.

“Initially when we looked at the properties they weren’t finished so there was a bit of guess work as to what the finished product would look like,” he said.

Woodards Carnegie director Ruth Roberts, who acted as agent for Melbourne couple Josh and Jenna’s property at 37 Cameron St, stood by her quote range. “It is fair and reasonable if anything I over-quoted,” she said.”
– The Sunday Telegraph, “The Block’s real estate agents under investigation”

I understand that the agents would have first been introduced to the properties when they were only part finished, but I thought that by the time the auction campaign began about four weeks ago, all of the properties were finished.  If so, wouldn’t they be able to amend their initial price range and list a more appropriate price range with their properties?

It will be interesting to see what the properties sell for when the auction is screened on Channel Nine tonight.

 

Post Auction Update – 22nd August, 2011:

What an amazing result in the auction that was screened last night!  39 Cameron Street (the home of Polly and Waz) was the only property to be sold at auction, as the rest were passed in below the reserve price. See:
The Age – “One buyer, many moments for Block finale”

What’s interesting is that Polly and Waz were the couple that received a bonus $15,000 marketing campaign from Domain.com.au. Did that make the difference?  It looks like it might have, as their property was the only one to receive a serious bid above $850,000.  Maybe it’s true – marketing makes the difference.

As for the investigation from Victoria’s consumer watchdog, well that seems a bit of a beat up.  All four homes were sold or passed in within the advertised range.

Now for the big question –

What does this result say for the Melbourne real estate market, and perhaps the national market?

I’d love to know your thoughts, so please leave a comment below.

 

Update – 23rd August, 2011:

Further to my question above Carolyn Boyd has posted an interesting comment at Domain.com.au – “The Block … that’s reality”:

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.

- Carolyn Boyd - Domain.com.au

 

Update – 24th August, 2011 – ALL SOLD

The final two properties have been sold.  Tania and Rod’s place sold for $922,000, meaning they get to keep $72,000 as that is what they achieved above their reserve price.  According to The Age:

“Rod and Tania’s house sold on Tuesday night in a backyard “mini-auction” attended by six potential buyers – only one of whom attended the filmed auction on Saturday night.”

Why were the wrong people at the auction?  I see two possibilities:

1.  The people who were invited to the auction had talked the talk to get them in … perhaps saying to the agents that they were seriously interested in purchasing but really just wanted to be on national TV.  Based on what some of the people said they would bid, and then their actual low or non-existent bids, it seems possible.

2.  The real buyers were too shy and did not want to appear on national television purchasing a property.  For some people the buying of real estate is a very personal matter that they like to keep private, so waiting until after the auction worked far better for them.

Jenna and Josh have also sold their place for $1,000,000, which means they get to keep $50,000.  On Saturday night, they turned down an offer for the house at its reserve price, believing they could get more for it.  Good move.

Update – 19th October, 2011

Here’s some bad news for the new owners of The Block homes –

Coles has lodged plans with Yarra Council to demolish the Richmond Plaza centre between Bridge Road and Church Street and replace it with 12 storeys of apartments and shops. The proposal includes 12,000 square metres of retail and commercial space and 530 basement car parking spots to be built opposite Cameron Street …

- The Age: The Block hammered by Coles proposal

Wow, talk about lucky timing for The Block producers and Channel Nine.  Imagine if news of this had come out before the houses had sold?  I had heard that Coles were planning on redeveloping their shopping centre, but I wasn’t aware of this large development.  Had any of you heard of this project before today?