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The Block Glasshouse Auction Results 2014: Blockheads stunned by struggling auctions; Upset and confusion swept The Block grand finale after three of the five apartments unexpectedly struggled to sell
Topic Started: 13 Oct 2014, 10:05 AM (2,493 Views)
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Blockheads stunned by struggling auctions

October 12, 2014 - 7:39PM
Emily Power

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Upset and confusion swept The Block grand finale after three of the five apartments unexpectedly struggled to sell, leaving contestants and their agents stunned.

The victors, Sydney brothers Simon and Shannon Vos, walked away with $335,000 - plus a $100,000 winners' bonus - after selling their apartment for $1.9 million while others, including Melbourne husband and wife Dee and Darren Jolly, appeared shattered after pocketing just $10,000 for months of hard work.

Some agents who auctioned the Glasshouse properties and other real estate insiders believe the reserves were set too high.

Other property sources say the auctions lacked depth of buyers and were shocked and mystified as to why the apartments didn't attract the usual premium – driven by the hit Channel Nine show's cachet and publicity - on top of market value.

The five buyers paid on or under market value – with sources saying they scored bargains - despite tens of thousands of dollars-worth of designer furniture and decor thrown in.

Some of the team's real agents were under intense pressure, with many would-be buyers keeping their hands shoved deep in their pockets as the cameras rolled.

Contestants watching their fellow teams' apartments go under the hammer were in tears as auctioneers tried to encourage bids.

Initially, a frisson rippled through The Block after the first two auctions resulted in handsome prize packets.

Chris and Jenna Susetio, from Campbelltown in New South Wales, sold for $1.81 million – $310,000 over reserve – followed by Simon and Shannon, who blasted away their competition with a $335,000 windfall from the $1.9 million sale price.

But the mood turned, and even seasoned buyers' advocates were shaking their heads in disbelief at the flat, tense auctions that followed.

Real estate agency Buxton's Karl Gillon, who auctioned Maxine Stokes and Karstan Smith's large, north-facing apartment, said he felt his $1.7 million reserve was about $200,000 too steep.

The couple, who got married during the show, collected $40,000 (they had $30,000 knocked off their reserve as a challenge reward), despite being among the favourites to win.

Mr Gillon was forced to maintain momentum by putting in four vendor bids. Only two of his nine registered bidders lifted their paddle.

The buyer, 20-year-old commerce/engineering student Shiji Ma – who purchased the property with his girlfriend Yue Pan for her parents, who are based in Nanjing, China - snapped up the apartment with just one, uncontested bid at $10,000 over the reserve.

He confessed he had his eye on other apartments – he was the under-bidder in Chris and Jenna and Simon and Shannon's earlier auctions – but said bought Max and Karstan's property because it was unexpectedly cheap and well under his budget.

The Newcastle newlyweds, appearing shaken and disappointed, disappeared into a stairwell to privately chat with Mr Gillon after their auction.

The Vos brothers held back tears after their win – but they weren't tears of happiness.

"It was heartbreaking," Shannon said.

"As stoked as we are to win, it feels like our guts are ripped out. As cliched as it is, we are family and because we have been through such an intense time with these guys we are best mates and to see your best mates do so much and not be paid for it, is very, very hard."

Read more: http://brisbanetimes.domain.com.au/real-estate-news/blockheads-stunned-by-struggling-auctions-20141012-11515g.html
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Not enough bidding baby boomer buyers to boost B-grade location in The Block Glasshouse 2014 auction results

Jonathan Chancellor | 12 October 2014

The latest series of The Block Glasshouse tried to make a silk purse out of a sow's ear.

And the reduced pool of savvy potential buyers - and bidders - didn't buy into all the associated hype as the final three auction results limped over their reserves.

With a $1.6 million average sale price - reflecting around $6900 a square metre - it actually almost succeeded, though the viewing public was deprived if they only desired uplifting show business hoopla.

It was thwarted in the end by its b-grade High Street, Prahran location. For Sydneysiders it would be like flogging prestige apartments on Parramatta Road, Annandale, which has very nice houses away from its busy thoroughfare, though without the trams. Certainly Prahran and some of its Chapel Street is a cosmopolitan suburb, but not quite everywhere yet in the immediate neighbourhood.

The most profitable selling market would have been student style - or Gen Y workers - rather than vast luxe given its proximity to Swinburne University with the 6 route tram out front and the railway very close via the Percy Street garage exit.

So the deep-pocketed baby boomer buyers that are the traditional recent Block apartment auction attendee either understandably didn't turn up or showed suitable reserve and mostly kept their hands in their pockets given the mediocre Prahran location. Couldn't imagine the baby boomers heading a few doors along to Misty’s Diner, a genuine American diner right next door to a hand car wash at what one blogger recently described as the bleaker end of Prahran High Street.

The local gay population didn't appear to embrace much of the Glasshouse either.

Also property success is often premised on population trends so those big three bedroom apartments were perhaps oversized for the very obvious Prahran composition of households without children. It sits at around 70% compared to the 50% Melbourne average. Ditto the lone person households category in the last census sat at around 40% of Prahran households compared with the Melbourne 23% average. There were just the 99 households in Prahran with five or more occupants.

Also RP Data puts the median Prahran apartment price at around $510,000, and going backwards a bit after its recent peak, presumably because of the enormous increase in newly constructed stock. Just across High Street is for instance, ART, a block of 50 apartments that has incorporated supposed hip art into its eastern facade ands its foyer after a Facebook page where people could vote for their favourite. Designed by Rothe Lowman for developer Crema, ART included 26 one-bedroom apartments, 23 two-bedders and the three-bedroom, two-bathroom penthouse. The one-bedroom apartments range from 51 square metres to 76 square metres; the two-bedroom apartments from 69 square metres to 87 square metres; and the penthouse was marketed as 160 square metres. Back in 2011 the off the plan prices for all but the penthouse ranged from $346,000 to $719,000, so from $6700 a square metre to $9400 a square metre. The penthouse fetched $1.16 million on its June settlement, so around $7250 a square metre. The former petrol station-turned residential development was offloaded by the Deague family at $5.5 million after they scrapped plans to build a hotel as part of its "art" series chain.

The much desired $2 million plus hopes for the Glasshouse proved elusive. One Melbourne buyers' agent has egg on their face for suggesting the $2 million likelihood even on auction eve when the feedback ought have been obvious.

"This is reality … the property market is the one thing we can't control," bemoaned decor consultant Shelley Craft during the Channel 9 telecast.

“Something happened ….that’s not easily explained by me or frankly by anyone else,” producer Julian Cress told easily convinced, naive newspaper reporting attendees, adding they used the same valuer in each and every series.

The full results:

Simon and Shannon, 2/125 High Street: $1.9 million ($335,000 over adjusted reserve)
Chris and Jenna, 2/121-127 High Street: $1.81 million ($310,000 over reserve)
Maxine and Karstan, 3/121-127 High Street: $1.71 million ($40,000 over reserve)
Michael and Carlene, 1/125 High Street: $1.39 million ($10,000 over reserve)
Deanne and Darren, 6/121 High Street: $1.38 million ($10,000 over reserve)

The further into the auction finale - and the more Scottie slumped into his couch - viewers got to see just how hit and miss property renovation success can be when buyer demand doesn't go deep enough for the ill-suited, over supply.

They were lucky all five apartments of The Block Glasshouse were sold under the hammer at their Prahran onsite auction, as the extended last offering brought flooding back memories of the Richmond auction disaster in 2011 when just one of the four Block cottages sold under the hammer.

But with metres of floor space over five floors, the Prahran building was almost double the size of the historic Dux House warehouse renovation at 47 O'Grady Street, Albert Park which the Watercress production company bought from billionaire businessman Lloyd Williams last year for $5.9 million. It was perfect for their flush buyer mix.

The Block Fans v Faves results which secured a $9.6 million total in April were as follows:

Steve and Chantelle, 1/47 O’Grady: $2.47 million ($636,000 above the adjusted reserve)
Alisa and Lysandra, 3/47 O’Grady: $2.375 million ($616,000 above the adjusted reserve)
Kyal and Kara, 2/47 O’Grady: $2.44 million ($567,250 above the adjusted reserve)
Brad and Dale, 4/47 O’Grady: $2.31 million ($507,250 above the adjusted reserve)

It was a similar success at The Block Sky High too at 142 Park Street, South Melbourne parkland which secured five sales totalling $7.6 million, with Watercress having retained the sixth apartment, after paying $6.71 million for the four-star bizMOTEL, which closed its doors in late 2012.

Apartment 5 Trixie & Johnno – $1.605 million - $205,000 over reserve
Apartment 4 Madi & Jarrod – $1.601 million - $291,000 over reserve
Apartment 3 Bec & George – $1.507 million - $242,000 over reserve
Apartment 2 Matt & Kym – $1.455 million - $250,000 over reserve
Apartment 1 Alisa & Lysandra – $1.435 million - $295,000 over reserve.

So the High Street Glasshouse office block now has six split-level, atrium apartments above two retail/restaurants premises after the production company, Watercress spent $8.25 million on the 1980s office building. The $2.5 million Brenchley Architects infill works schedule was mostly internal, and then the constantant couples spent their renovation funds.

The $8.2 million auction proceeds covered the initial outlay with Watercress retaining the sixth apartment plus two street front retail premises. And then there is all the ad revenue for Channel 9.

The winning Glasshouse apartment at 4/125 High Street, renovated by brothers Simon and Shannon Vos, had a southerly aspect overlooking busy, noisy High Street, so it was the hipster fit out that seemed to work in its favour.

The 249 square metre apartment was the second largest of the five on offer.

It's priced reflected the top $7630 a square metre.

Chris and Jenna with their runner-up offering had 277 square metres of floor space, making it the biggest apartment in The Block. But with just skylights and an internal terrace along with the rooftop terrace. It's price was $6530 a square metre.

Max and Karstan had the apartment at 3/121-127 High Street Prahran, with a sunny north-westerly aspect. The couple also have an extra little, almost useless room. The sale worked at to be $7125 a square metre as their apartment was 236 square metres of floor space.

Michael and Carlene's apartment at 1/125 High Street has 236 square metres of floor space, and a southerly aspect. It was the poorest price at $5890 a square metre.

Deanne and Darren's apartment, 6/121 High Street, was the smallest on The Block, with just 186 square metres of floor space.

But it, however, had the most desirable aspect, facing northward and delivering city views. Its sale price reflected $7,419 a square metre, the second placed by square metreage.

Each apartment will also have 70 square metres of private storage and two car spaces.

Viewers saw it was a very close shave exceeding the reserve for the threesome of the contestant couples.

And there were two terrific over-reserve results on High Street in the ninth series of the Channel 9 series.

It appeared the order of sale again impacted the result as it did in past series where investors, rather than home buyers, were at the fore, but this time it favoured those who went up in the auction order.

The first series of The Block in Bondi Beach back in 2003 came after the $1.95 million four block acquisition through the Channel 9 company.

Such has been the success of the reality television renovation stress series that nowadays that doesn't even come close to the current day renovation costs.

The next series at Darling Street, South Yarra might work out ok, though it is cheap serviced apartment heartland. Then onwards to the still unconfirmed Octagonal which will be anyone's guess as to how it goes!

Read more: http://www.propertyobserver.com.au/finding/residential-investment/sales-and-auctions/36684-b-grade-high-street-prahran-location.html
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The Block result: what happened when the cameras turned off?

News.com.au has crunched the numbers, and for 70 days on the job, seven days per week (over 10 weeks) at 16 hours on the tools per day, Dee and Darren & Michael and Carlene were paid a measly $10.71 an hour each.

That’s almost $6 less than Australia’s minimum wage, at $16.87/hour.

The figure is based on the couple’s $10,000 prize money plus $700 per week earnings that Nine pays each contestant while on the show.

So unhappy were the couples with the live auction result, the show’s after-party for contestants and crew was cancelled, with contestants feeling flat and underwhelmed.

Read more: http://www.news.com.au/entertainment/tv/the-block-result-what-happened-when-the-cameras-turned-off/story-fn8yvfst-1227088392377
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Zero is coming...

Dumb and dumber.

Peter
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The Block Glasshouse: Darren Jolly 'will accept' disastrous loss

October 13, 2014 - 6:34PM
Nick Galvin and Scott Ellis

Ex-AFL star Darren Jolly says he and wife Deanne's disastrous auction result in finale of The Block Glasshouse feels similar to losing a grand final.

"I've been through winning grand finals and I've been through losing them and I kind of knew that feeling," he said. "Saturday night was very similar to losing a grand final.

"It was really disappointing to see the hammer go down and only have made $10,000. I flogged myself to the edge numerous times to give something to our kids and help us kickstart our business and get something going. It was really flattening."

But the former Swans and Collingwood ruckman has slammed as "absolute bullshit" rumours that the couple is considering legal action.

"It made me really angry," he said. "I don't even know who would think of starting those rumours. There is no way in the world we are bitter and angry towards Julian [show creator Julian Cress] or Channel Nine about the result. It's just the property market. It's out of their control."

Jolly revealed that he and Dee forced themselves to swallow their disappointment and join other competitors and crew at a Prahran pub on Sunday night to watch the pre-recorded episode go to air.

"As much as I didn't want to watch our bit, we fronted up with our kids," he said. "It was good to have a few beers and watch it and talk about it.

"We're not going to hide under a rock. We accept that it's done. Money's not everything. It made us put things into perspective to be honest. There are a lot of people worse off than us at the moment."

Executive producer Julian Cress praised Jolly's philosophical attitude.

"He played a game and he lost – he understands that better than anyone else," he said.

Cress said he was "devastated" for the pair and wanted them to make the sort of sum pocketed by eventual winners, Tasmanian brothers Simon and Shannon Vos.

The Vos brothers walked away with $335,000 profit, plus the $100,000 winner's prize, after a dramatic evening in which three of the apartments barely limped above their reserve prices.

Cress rejected claims the reserves were set too high, pointing out that the eventual buyer of Maxine Stokes' and Karstan Smith's apartment, who paid just $10,000 above the reserve, admitted afterwards that he would have paid more.

Read more: http://www.smh.com.au/entertainment/tv-and-radio/the-block-glasshouse-darren-jolly-will-accept-disastrous-loss-20141013-115951.html
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