Total Block Disaster

August 21, 2011 admin Australian Economy, Australian Housing 13

Channel 9’s reality TV show The Block has tonight transparently shown the nation via their arm chairs, the true depressed state of the property market. Only one of the four renovated houses sold at auction yesterday at the Fitzroy Town Hall. The only property sold – Polly & Warwick’s, fetched a marginal $15,000 over the $840,000 reserve.

The Herald Sun today reported that Victoria’s housing market is tipped to crash with an oversupply of about 70,000 dwellings. This comes as economists predict 100,000 jobs will be lost by years end, with a further 100,000 to disappear next year as the Australian economy struggles with a lack of consumer spending caused, in part, by high household debt levels.

» One buyer, many moments for Block finale – The Age, 21st August 2011.
» Victorian housing crash tipped – The Herald Sun, 21st August 2011.
» Jobs under pressure – The Age, 21st August 2011.
» Job losses imminent in manufacturing industry: Howes – The ABC, 21st August 2011.




13 Comments

  2. I heard Scott Cam say catch you next year. If they can find any contestants, I think next year will be a great show. By that time, Australia is probably following the U.S. style housing crash with falls limited to about 20% a year. They could lose hundreds of thousands by the time they renovate them and finally sell them.

    Anyone up for registering as a contestant next year?

  3. They apparently paid 3.6 million for the four properties. Add another $100,000 each for renovation means 4 million was break even. The reserve prices alone amounted to less than that and three of the four properties didn’t meet the reserve price. Total sum of the top bids for the four properties is 3.41 million. I don’t know what was the purpose of this show but it clearly highlight that the property market is going backwards. I doubt they will be brave enough to do another show in 2012.

  4. Robert,

    They spent a hell of a lot more than $100k per place. One article states ‘ Since then, a second storey has been added to three of the houses, all four were restumped, rewired, replumbed and re-roofed, and each has had $100,000 spent on it by the contestants.’

    I think there was claims of $400k spend on each place, therefore they needed $1.3million each to break even.

  5. What does this say about the true auction clearance rates in Melbourne? Enzo must have had a really bad nights sleep! With all four real estate agents being investigated this just reinforces that the majority of the real estate industry has total disregard for vendors and buyers and will go to any length to keep the Ponzi Ship afloat.

    Hopefully Channel Nine has educated the population on the true state of real estate in Australia!

  6. The reserves were well over what they should have been by at least $100,000 in some cases. Compared to last year when the winner was over $150,000 the least $90,000 over reserve. The market was different a Sydney market in a top area and apartments. They really should have thought this one over, Richmond Trendy area but houses and in this market. Poor Josh and Jenna wanted to be the first, it did not matter the buyers all over Australia are cautious…..reserve to high and like Amie said what a waste of time….really very disappointing…..great show…good concept this year until the end but what a fizzer for the audience and the contestants…..

  7. So, $3.6M spent on properties, plus $1.6M on renovations, plus, say, $1M on actual production of TV series = $6.2M in total outlays. Some of the cash will be made back from selling the properties back, another source of cash flow will be the adverising revenue – the show ran during prime time, so I’d imagine the ad spots were pricey. TV people probably made their money back plus some. “Investors” – not so much.

  8. I’ll put my hand up for being a contestant or maybe even a producer next year. Here is my concept for The Block 2012.

    We revisit the unsold homes and demolish them, salvaging anything of value and flog it off on ebay/trash and treasure, and hock the furnishings at Cashies to pay for groceries/school fees/fuel and the other necessities of life that go unattended when you take on intergenerational debt.

    The winner is the one that strips the place TO THE BLOCK and maximises the returns.

    (p.s. Channel 9 I want my royalties if you pick this idea up)

  9. Brace yourself readers! Shocking news from our leader in red.
    “There will be no carbon tax under a government I led”
    Or how about “….the fundamentals are strong, ….we are the envy of the modern world”
    Tell that to the thousand families that used to be employed by Bluescope. Did they have a mortgage? Credit card debt? Dreams? Thank you Mr Globalisation! Seems the benefits are starting to bite back.

    I wanted to bid on the block, but based on a $750 weekly rental estimate, I could only offer $546,000 for each. Seems a bit overvalued at the moment. Might wait until reality hits the market before investing in this asset class.
    Cash and Gold/Silver is king ATM, Gold is going through the roof ! Is fiat money losing its value?

  10. Australia is facing its demons. Wait till Commidities crash……. then Australia is really screwed. That is coming.

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