Chloe Hes and Ben Speedy were crowned the winners of this year’s The Block NZ, but their victory was bittersweet.
Their stylish terrace house fetched $1.145 million at auction, just $4000 above the reserve – the smallest winning profit in the show’s 10-year history, and a harsh reflection of the change in the Auckland housing market.
The friends, returning to compete in The Block after losing out in season seven, walked away with a $100,000 cash prize plus their auction profits, but the other teams weren’t so lucky.
Only one other house sold above the reserve, and one house sold at a loss, bringing the tenth season of the reality TV show to a disappointing close.
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Hes and Speedy said after the results: “We can’t believe we won! We feel really privileged that we got the opportunity to return and create a home we are truly proud of.”
The four three-bedroom terrace houses the teams created on the hills above Orewa, on the northern fringes of Auckland, were offered to bidders at a private auction last month, but the results weren’t broadcast until tonight’s finale.
Maree and James Steele get emotional watching their auction. They won the People's Choice Award. Photo / Three
Maree and James Steele sold their home at auction for $1,152,100, just $100 above the reserve - quite a comedown from the $147,000 they made in season three of the show, but at least they won the People’s Choice Award, decided by public vote, and took home a new Suzuki Vitara JLX, worth around $28,000.
Stacy and Adam Middleton, who earned nothing from their first appearance on The Block, walked away with nothing for a second time after their house sold after the auction at the reserve price of $1.148m.
Quinn and Ben Alexandre, who won just $10,000 the last time they appeared on The Block, made a loss this time around after their house sold for $39,000 below their reserve of $1.199m.
Shocked: Quinn and Ben Alexandre's house passed in at auction. It later sold below reserve. Photo / Three
Stacy Heyman and Adam Middleton look upset as their house fails to sell under the hammer. Photo / Three
The teams only get to pocket the profit they make from the sales – what their house sells for above the reserve – so the results is a bitter pill to swallow, seeing as a) they had all returned to make more money and b) last year’s contestants made an average auction profit of well over half a million dollars.
Beating last year’s record sale prices was never on the cards. Season nine’s Block homes were sold at the height of the boom, before all the credit dried up, interest rates skyrocketed and inflation became a major headache.
And last year’s houses were located in a popular inner-city suburb where the median sale price was $2m at the time.
This year’s teams faced a harder hill to climb: house prices are falling and they were selling cookie-cutter homes in a new-build development on the northern-most fringes of Greater Auckland.
The final prices were in line with recent sales in the beach town. A four-bedroom townhouse in the same development fetched $1.2m in August, and many agents OneRoof talked to in the lead-up to the finale expected the homes to fetch around $1.3m under the hammer based on market activity.
“There’s quite a glut of townhouses. That market is a little slow,” Lane Sanger, owner of Mike Pero real estate’s Orewa office, told OneRoof last month.
“[In February] we got $1.4m for a townhouse right on the beach on Hibiscus Coast Highway, otherwise you’d get $1.2m. But The Block houses are fully furnished, better appointed so you might be around the $1.3m mark.”
According to the latest figures from the OneRoof-Valocity House Value Index, property values in Orewa had dropped 1% in the last three months to $1.345m, while Auckland property values dropped 4% to $1.424m.
James Wilson, head of valuations at Valocity, OneRoof’s data partner, said: “The results achieved by the homes definitely reflect market conditions in Auckland, with the ‘hype conditions’ required for shows like The Block to succeed a distant memory in Auckland.
“On paper, you would have expected new-build townhouses in the area to have achieved more, so there will be some very happy buyers out there right now. To pick up homes like these, with such a high spec internal fit-out for that price goes to show that conditions are still very much in favour of buyers. There are bargains to be had.”
Developer Caleb Pearson, who won The Block season two with wife Alice, told OneRoof last week that using “cookie-cutter” terraced houses meant the contestants had to focus on the design elements rather than the renovation aspects as they had in some of the previous seasons.
“It is interesting to see what you can do with four identical homes. I quite like on previous seasons more of that character element where you have to strip back a bit before you start going forward.”
Pearson thought the contestants had done a good job with what they had. “You have to have a strong design when you are starting from a blank and new canvas,” he said.
But he was concerned that selling a property in a developing suburb where there are similar properties on the market might give buyers more options and make them harder to sell. “In a more established suburb there are less of those direct comparisons.”
Bayleys Takapuna agent Victoria Bidwell, who was a judge on the first season of The Block NZ, questioned whether there were enough of the same buyers looking for similar properties with a similar budget in Orewa.
“They are really nice modern houses that should have big appeal in the market, but Orewa isn't a big area to sell four very similar houses all on the one night,” she told OneRoof last week.
Terrace houses are a “very current product”, she said, and could suit that location where there were a lot of people retiring and wanted lock-up-and-leave holiday homes.
Bidwell said the market had improved over the last month so it could be good timing because there is limited stock available at the moment.
“But it's just a matter of whether you can find in that location - and I'm not an expert in that area, but just from the ones I was involved in in Auckland - you still have to find a minimum of four buyers with similar budgets all wanting the same thing and exactly the same time who are cashed up.”
Both Bidwell and Pearson agreed that The Block houses offered buyers value for money because they were high-spec and included a lot more than what comes in other houses.
“They have proved to be good buys for people who have hung on to them and sold them a few years later,” Bidwell said.
Last year, the three-bedroom house that Maree and James worked on in season three of The Block NZ sold under the hammer for $3.182m - almost $2m more than what Maree and James got first time round.
