The Block 2023: Why the show could be facing auction disaster this season, according to Frank Valentic
The Block could be faced with auction anguish this year unless its producers are willing to take a loss on the home’s purchase prices, according to a prominent Block bidder.
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The Block faces a dire choice between another round of disastrous auctions or taking a hefty loss on this auctions.
Buyer’s advocate and a regular on the show Frank Valentic said he was “worried” for this year’s contestants after the shows producers set suburb records acquiring the Charming St, Hampton East, homes with prices ranging from $2.3m-$3.5m — putting them among the suburb’s 10 priciest purchases ever.
While The Block’s producers paid a house price record for the suburb as they acquired No. 20 Charming St for $3.5m, Mr Valentic said most of the homes would need to break that figure to come anywhere near recouping costs for Channel 9.
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“Are The Block homes going to be able to sell for almost suburb records? That’s what they will need to do to recover their costs,” Mr Valentic said.
“I’m worried for the contestants this season more than any before.”
He said the nearest comparable sale to be found in the suburb was in Kinross St where a considerably more modern home sold for $3.015m in 2021.
The only other home in the suburb to come close to $3m was a Reynolds St address that made $2.933m, but Mr Valentic said it was likely a market anomaly.
Despite this, he said he would be surprised if the show set reserves below $3m as they sought to recoup costs, which he estimated could be as much as $1.5m on each renovation.
Added to their purchase prices that could take some of the homes to $4.5m or beyond.
“They will get nowhere near $4.5m in Hampton East,” Mr Valentic said.
“They don’t get that in Hampton, which is much more expensive.”
While Mr Valentic said a “sneak peek” of the swanky renovations during construction revealed they were “the best I have seen”, he said producers would still need to tread carefully with auction reserves.
Ordinarily the show benefits from a rising property market, but Real Estate Institute of Victoria figures show Hampton East’s median house price fell $523,000 (30 per cent) from a $1.676m peak at the end of March 2022 to $1.153m at the same time this year.
Remarkably, they rebounded an incredible 36.2 per cent in the three months to June and the suburb’s typical home is now worth $1.57m.
PropTrack figures show a $75,000 (4.9 per cent) from June 2022 to $1.45m a year on, but enough to still pose an issue for clawing back the purchase price.
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Mr Valentic said with clear volatility in the suburb in recent months, the contestants faced a nerve-racking wait.
“I hope it’s not a Block disaster, but it could well turn out to be one of the biggest disasters The Block houses have seen,” he said.
“The Block contestants are playing in very much uncharted waters. If I was a contestant in this series, I’d be more worried than any other in other series’.”
Mr Valentic added that fans and prospective buyers should expect a few surprises this season, with homes to be transformed with new looks ranging from “edgy” to “beach home”.
“I think there will be a bit of variety,” Mr Valentic said.
“And they were among the best I have seen in terms of finishes and detail.”
The homes’ 600-680sq m blocks are likely to appeal to family buyers, especially with five schools nearby, and the buyer’s agent said they might do better than the show’s mostly underperforming auctions in Gisborne last year.
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While one home sold for $5,666,666.66 and earned contestants Oz and Omar almost $1.687m in prize money, two others were passed in — the last one selling for $3.9m and $180,000 below its original reserve in February this year.
With a “nice quiet street”, Mr Valentic said family-conscious buyers were the best demographic to sell to in the current market.
“I would expect most of the buyers to be looking for family homes,” he said.
Buyer’s advocate Nicole Jacobs has a long history with the show and also warned against setting high reserves.
“I think last year reserves were set in a market that was a little more buoyant than it was by the time they were being sold,” Ms Jacobs said.
“So this year they might be a bit more realistic.”
After selling her own home in Bronte Court, Hampton, to producers for the 2021 season, she added that a setting closer to Melbourne’s CBD would help this year — as could a relatively quiet property market.
“There’s not a lot of stock, especially where you could walk in and need to do nothing to the home,” Ms Jacobs said.
The Block’s first episode for this season will air on Channel 9 this Sunday.
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