The high sale prices achieved on Channel Nine’s hit TV Show The Block reflects a stronger than expected property market and bodes well for home buyer activity moving forward, a number of industry experts have argued.
More than 2.4 million viewers tuned in to watch the auctions on the hit TV showThe Block late last month, with the four homes selling for between $1.33 million and $1.62 million. Each sold for well above its respective reserve price.
According to Dr Andrew Wilson, senior economist at Australian Property Monitors (APM), the show's strong auction result bodes well for the property market.
“I think it is absolutely positive for consumer confidence,” he told Real Estate Business.
“I think when we have a market place where we see a number of competing bidders, not just for one property but for four properties, I think that is a positive.”
Janice Dunn, real estate sales consultant at Eview Real Estate Partners in Melbourne, agreed.
“I didn't watch The Block but I feel like I know everything that happened by all the media coverage it has had as a result of the awesome outcome,” she wrote on the Real Estate Business Magazine LinkedIn page.
“My buyers are all talking about it which is great, at least there is something to talk positively about in relation to sales results.
"Regardless of whether the reserve was high or low, they sold, and I'm sure any vendor that got a result like those would be ecstatic.”
Similarly Mark Shorrock, sales manager at Ray White Bellbowrie, has seen a positive reaction from his clients since the on-air auctions.
“For me it has helped put a positive effect on the market as everyone up here is talking about it,” he wrote.
However some agents are not convinced the hit reality TV show will impact consumer confidence at all.
“It's entertaining TV for those who watch it but shows like The Block are a spit in the ocean in terms of having any affect on consumer confidence,” Bernie Kroczek, of Bernie Kroczek Real Estate Agents in Perth, wrote on the LinkedIn page.
Despite the negative press surrounding the Melbourne market, the show's positive result shows buyer activity remains robust for the 'right' type of property.
“The Melbourne market has really been subdued for about 12 months, there has been a lot of negative press,” Dr Wilson said.
“It is a positive also nationally, it shows that people are still out there buying houses and competing, and it’s not just one buyer or two buyers but a number of buyers," he continued.
“So the right property in the right location certainly continues to attract buyers at a premium in terms of price.”
According to Mr Kroczek the reserves were set “artificially low” in order to keep advertisers and show watchers happy.
“The whole thing was a set up for TV (advertisers) so they had to set the reserve artificially low to guarantee a result,” he wrote.
“Had they not then the whole circus would have been a flop and the advertisers [would have] not been happy.
However Dr Wilson believed the auction results are consistent with an improving market.
“I think the results were fairly reasonable," he said.
“With a nationwide marketing campaign I guess you are always inclined to get more competition between buyers because of that television focus,” he said.
“The reserves were set three months prior to the auction and in that time APM has modeled South Melbourne as actually being a growth suburb of buyer activity in Melbourne.
“We saw a seven per cent increase in the median house price in South Melbourne in six months from November to May, so certainly buyer activity held up in south Melbourne, prices are growing.
“Given the reserves were set three months before the auction in a growing market, it was no surprise to see the reserves were quite easily surpassed in the actual auction.”
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