A move away from the country’s most expensive housing market could make sense for the producers of The Block NZ following last Sunday’s auction flop.
The finale of the tenth season of the reality TV show ended with two of the teams walking away empty handed after their properties failed to turn a profit.
And while one of the show sponsor TSB gifted $10,000 to each of the losing teams, future contestants may be put off from taking part if auction gains are not on the cards.
Real estate agents and one of the show’s past winners told OneRoof that the show would be better served if it returned to its earlier format, where contestants had to renovate old homes rather than just “decorating” cookie-cutter new-builds.
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There are early reports that The Block NZ producers may have already secured another Auckland site for the next season, but real estate bosses in cities outside Auckland say moving the show to Tauranga, Hamilton or even Christchurch has merits because each of these locations has plenty of older homes with renovation prospects.
This year’s winners, Chloe Hes and Ben Speedy, sold their terrace house in a new-build development in the hills above Orewa, on the northern fringes of Auckland, for $1.145 million - only $4000 above the reserve, but enough to land them the $100,000 cash prize.
Runners-up Maree and James sold their home for $100 above reserve but they won the People’s Choice Award, which netted them a car worth $28,000. Stacey and Adam’s house sold post-auction at reserve while Quinn and Ben sold their home post auction $39,000 under the reserve.
Agents say locating The Block NZ in more desirable suburbs, such as last year's Point Chevalier townhouses, would reap better auction profits - such as the $760,000 won by Arthur and Tim. Photo / Three
Mike Pero Orewa owner Lane Sanger didn’t think Auckland should be ruled out completely and said some parts of the super city could still work for the show. He thought sought-after locations such as Point Chevalier and Takapuna, where past seasons have been based, would work better as buyers would pay a premium to get into those areas.
He said the results of this season’s auction reflected the slowness in the housing market and the fact that there was a lot of choice of homes in Orewa.
In any market –booming or quiet – sellers needed to be able to add potential to the property such as carrying out a significant renovation rather than cosmetic design, he said. “They had a lot of limitations there. It’s really just minor décor stuff they were doing.”
Caleb Pearson, who won The Block season two with wife Alice, told OneRoof last week that he favoured renovation projects which had a “character element” showcasing the contestants’ renovation and design skills.
Some agents suggest renovating existing properties, such as those in the Villa Wars of 2015 would make better returns. Photo / File
But as the cost of setting the show in Auckland appears to be placing limitations on the producers, agents outside Auckland believe the country’s other main cities offer as much or even more potential.
Lodge Real Estate Hamilton managing director Jeremy O’Rourke agreed there was probably more money to be made in renovating houses in older more established markets than competing in Hamilton’s new-build market at the moment.
He said plenty of Hamilton suburbs like Claudelands, Beerescourt, Hamilton East and pockets of Fairfield have older houses ripe for renovation.
“It [Hamilton East] has been quite gentrified. There are lots of character homes there and some of them are sitting on some reasonable sections so they could be cut.”
Renovated homes in these suburbs are proving really popular, he said, but it did come down to what they were bought and then on-sold for.
Hamilton agents think suburbs in the river-side city would be ripe for The Block NZ as renovations. Photo / Getty Images
“There would be scope to do it because we’ve seen people do exactly that. You don’t need to drive very far around the city to see the number of terraced homes that are actually going up. I think the ability to take something, do it up and create a unique proposition in the market, something which isn’t readily available, that’s where the gain is. Taking a three-bedroom with ensuite terrace house and simply decorating it, I think there’s lots of competition for that and there are terrace houses at all price levels at the moment.”
Tremains Tauranga managing director Anton Jones said The Block producers should also consider Tauranga as they would also be able to find either older houses to renovate or newer subdivisions where there would be terraced housing.
While it depended on whether the producers and their viewers favoured watching older homes being transformed or new homes fitted out, Jones said the aim should be to buy in an area where they could make a profit.
“There will be a lot of people, certainly in this market, that would rather look at refurbishing a property than doing something brand new, so that might work a little better.”
Good suburbs offering potential do-ups included The Avenues and Judea in Tauranga or even some areas of Mount Maunganui. There are also larger sites still available so the producers could also transport another home onto the section as they have done in earlier seasons in a bid to have all four homes lined up next to each other.
Christchurch, with its popularity of auctions and affordable properties might also make a good location for The Block NZ. Photo / Getty Images
“You don’t want to get something that’s too, too high in value right from the outset because you may not get the margins that you need. So, it’s just finding those certain areas and certainly those older areas would probably work better.”
But if new is what they are after, then he would direct them to one of the new subdivisions in Papamoa or at The Lakes.
But for a property market where auctions still dominate and are working well then Bayleys sales general manager Rachel Dovey said Christchurch would be a good choice for an upcoming season of The Block.
One of the biggest drawcards for Christchurch could be its property prices, Dovey said, because with an average sales price of $790,000, it offered good value for money and housing was still in demand.
Chloe and Ben celebrate their win. Agents say decorating cookie-cutter terraces offers less scope for contestants to shine - or make bigger profits. Photo / Three
“Also due to staff shortages etc. it is more challenging to build and renovate, and the dynamics of the show would provide stimulus for a marketplace which attracts a younger base to property ownership.”
Homes with great renovation potential could be picked up in central locations such as St Albans and Mairehau which have large sections and gardens that could be transformed into Ponsonby-style homes, she said.
Riccarton, on the western side of Hagley Park, she said, was also another appealing option as it had seen a number of retail stores and cafés pop up and was an easy location to live, work and play. Dovey also pointed to Ilam with its older homes built between 1910 and 1969 and a great central location which appealed to university students and first-home buyers.
But if the producers do want to follow the new-build format used in recent seasons then the greater Selwyn area might be the place to look as Rolleston was one of the fastest growing townships last year, while Halswell also had a number of new subdivisions and appealed to young families.
