Recent figures from RP Data suggested the upper end of the Melbourne market was experiencing a growth phase.
“Over the past year the strongest growth in values has been seen in many of the city’s most expensive suburbs: Hawthorn East, Balwyn, Camberwell and Armadale,” said RP Data’s Victoria housing market specialist, Robert Larocca.
But last night’s results from Channel Nine’s The Block blew everyone away.
“We had exceptional levels of interest in the home during the lead-up. We’re absolutely thrilled with the win,” winning auctioneer David Wood told Real Estate Business.
Despite the media spectacle, Mr Wood and the hockingstuart team claim they used the same campaign they would for any other property of this calibre.
“We put a set of processes in place from the start that we thought would be right for this apartment. We marketed it extensively in two popular Chinese websites: one Australian and one in mainland China. We had a heavy representation from bidders from China, so it’s great to see that effort contributed to the eventual record sale,” he said.
With a reserve set at $1.834 million, Mr Wood sold Steve and Chantelle’s property for $2.47 million - $636,000 above the reserve price.
“If you asked me to sell this property as a normal home – without the TV cameras and media hype – I’m still comfortable we would achieve the same result because they are so unique. For the location, which is as good as it gets, you don’t get properties like this,” said Mr Wood.
Winning bidder and buyer’s agent Frank Valentic told Real Estate Business that the new owners were actually a young local couple.
“The winning couple had missed out on quite a few properties, so they were wrapped with the result," he said.
“The contestants should be very thankful to the producers for giving them very kind reserves.”
But this wasn’t the only property Mr Valentic was bidding on – he was representing a different interested party for each of the four auctions.
“Two of my clients were investors and two were looking to occupy the property," he said.
“We expected the market to see value in the $2.3-$2.5 million range based on comparable sales.
“We had our budgets and returns worked out for our investors, and we came close but couldn’t quite stretch it.”
While more affordable housing is typically targeted by investors, Mr Valentic said they "absolutely" would be smart investments.
“The depreciation benefits are very very solid, around $50,000 a year, so almost a thousand dollars a week," he said.
“We estimated that we’d be able to receive between $1,700 to $1,900 a week in rent fully furnished, which is nothing to sneeze at.
“It has the fundamentals for capital growth in a great blue-chip location. It has a work score of 93 out of a hundred, and the properties themselves just have the ‘wow’ factor.”
Previous properties from The Block have resold for decent profits. The property at 37 Campbell St in Richmond was sold last September for $1.15 million, $150,000 more than the owners paid for it in the televised auction in 2011.
A second property from The Block also sold on the same street for $227,000 higher than the original purchase price.
Tony Lambrianos, director at Results Mentoring, believes there is a certain premium attached to owning a property from the hit TV show.
“The 're-sellability' of something developed by The Block seems to be pretty good. I would say the likelihood of that selling over another property in the street is probably better because it has the status of The Block," he said.
“However, I think it's only as good for as long as the show is on air.”