My Learnings From The Block 2020
Last Saturday at 10am at the Block in New Street Brighton I arrived on site to prepare for another auction.
After months of construction, airing of the programme, scouring Melbourne for buyers for Houses 1 – 5 , countless private inspections and at least 100 hours of time, talking , phoning, preparing the moment had arrived.
First things first was getting past the security guard but after 9 years I was waved through by a familiar face and then proceeded to the registration desk and pick up my trusty number 8 paddle.
It was a humid Melbourne day and with auction held outside in the backyards of each property sunscreen and sunglasses were required.
After 9 Block auctions I am familiar with the process, sound guys mic me up, sound check and sometimes makeup but no makeup today.
During the week I had 4 50/50 buyers pull off 3 days before the auction , two who I had purchased Block properties for previously and who had the freight I thought to give us chance of success.
My remaining buyer was an overseas family who were watching proceedings on Zoom.
For investors, each of these houses could be leased for $2500 to $2700 per week, Tax depreciation ranged from $2,900,000 to $3,200,000 per house over the life of each investment.
During the selling campaign the buyers agents develop good relationships with the selling agents with whom we keep in contact almost daily.
My expectation was that all houses would sell between $3,500,000 and $3,800,000.
I am a keen observer of Block auction prices, I’m a Valuer after all and listened carefully to all the selling agents and feedback from my buyers.
I believe we were all on the same page before the auction.
The expectations prior to the auction was that there was money for House 4 and this would attract the most interest.
My expectation was that I would need $3.7- $3.8m to secure it.
What was clear from the outset was that the buyer pool was smaller than I thought.
There was one independent on Zoom, another buyers advocate had one buyer, I had one , another buyers advocate was buying for himself and there were 2 others that never bid.
So auction 1 was purchased by the zoom buyer, at a price slightly above my expectation but I was not surprised but I was wary of Danny Wallis who bid against me last year at the Oslo and who purchased Mitch and Marks house last year .
When he threw down a bid for $4.2m on house 5 bidding against a young lady I was astounded.
This house received the least support of almost every buyer I had taken through to show.
Who would have thought that House 5 at the southern end, with the smallest living area and tiny dining room would take out the ultimate prize!
Danny was not the ultimate winner of this house with a young lady buying house 5 as her home. Danny had pushed her to the brink!
Danny had bid on two without success but the scary thing was I now knew his buying limit which was $600k higher than mine and I believe everyone else left.
There were 3 houses to go. Danny had success on house 3 paying $3.8m. It seemed overs to me and surprised everyone else but it was knocked down. Danny seemed happy.
I then thought oh well there are 2 houses left, I had at least one advocate covered and the buyer pool looked really thin. I was fairly confident of buying one of the last 2 houses!
I liked House 2 and threw down a bid of $3.2m Danny then threw in a $1m killer bid and auction was over. I was on my knees and Frank and I handed our paddles to him. We could not compete.
He had purchased 2, this one for $4.2m!
House 1 was a good house at the northern end, we were told Danny had left and I was confident I could buy one for my client. Unfortunately for me Danny turned back and went whack with a $4m bid, $500k above the next highest bid and the show was over.
Danny had a row of house 1, 2 and 3 and had splashed nearly $12m on 3 houses on New Street Brighton.
- House 1 – $4,000,000
- House 2 – $4,200,002
- House 3 – $3,800,000
- House 4 – $3,856 000
- House 5 –$4,256 000
Great result for Channel 9, the producers and the contestants. A day unfortunately the advocates would rather forget!
I am often asked why I come back each year to participate as one of the Buyers Jury as we used to be called.
There are 3 reasons that come to mind.
- The Block produce such an amazing quality product every year that has all of the very latest products, fixtures and fittings. Every inspection I learned something new about how something was constructed or fitted. How often do we see curved walls and kitchen benches! After 30 years in real estate I continue to learn on the job and I am very grateful for that
- I develop close relationships every year with 5 of Australia’s best real estate agents and auctioneers. I learn from them and I’m sure they learn from me
- I get to meet and work with some really talented people such as , the producers , architects , contestants and stars of the show. I hope that they see value in my comments and advice and collectively this helps the show and me get better each year
Start saving folks for next year’s series of The Block in Hampton , a great bayside Melbourne suburb where The Block will again be selling houses. I hope to be back again too to represent one of you at the auction!