The Block 2015: How will auction clearance rates influence final sale prices?

How will Melbourne’s free-falling auction clearance rate (ACR) shape The Block auction outcomes when the properties go under the hammer at the end of this month?

Blocktagon contestants from Season 11.With Melbourne’s auction clearance rates (ACRs) sitting at 69% and continuing to head south, we wondered how a low ACR and a softening Melbourne property market may affect The New Block 2015 auction finale.

We paired the regional monthly and annual ACRs for each of The Block auction locations to see whether there is a correlation between ACRs and auction sales results for each series.

What did we find? That a clearance rate lower than 65%, or ranging between 35.7% to 64.4%, can potentially contribute to lower auction sales results, or profit margin, for The Block properties.

Although South Yarra's current monthly ACR of 69.5% hovers just above this threshold, we wonder if The New Block 2015 contestants should be a little concerned about the fate of their property come auction day.

Previously onThe Block...

We’ve seen properties being passed in at auction, breaking even or only just scraping above reserve by a bleak $5,000 or $10,000 (which may have led to Channel 9’s decision to set reserves strategically low in recent seasons).

If we rewind back to Season 6 (the All Stars series), Scott Cam claimed that the buyer of Mark and Duncan’s apartment “must be rapt because he just got the bargain of the century.” We’ve seen bids come to a sudden halt, properties passed in and contestants walking away with a harrowing $0 profit after months of slogging it out at renovation boot camp.

Watch our interview with The New Block 2015's winning auctioneer Damien Cooley

Our analysis

We reviewed The Block auction results of the previous 10 series to see if auction sales performance was impacted by the respective monthly regional, and annual city ACRs for The Block auction markets.

Since the average ACR for regions are typically more accurate than the average ACRs for suburbs (due to a higher volume of auctions), we drew upon both the monthly regional and annual city ACR for our analysis.

Interestingly, for all seasons in which one or more properties were either passed in, sold for market value or sold for only $10,000 above the reserve- that is, seasons 2, 3, 4 and 9- the monthly suburb ACR was 53.5% on average at the time of auction.

Out of these seasons, the monthly suburb ACR ranged from 35.7% to 64.4%. This suggests that independent of all other factors, an ACR lower than 65% can potentially contribute to lower auction sales results.Season 9 auction results.

While we acknowledge that auction performance results are determined by range of economic and market criteria including buyer sentiment, affordability, interest rates, the number of properties on the market, as well as the season itself, we independently assessed the auction sales of each series on The Block and found that more dismal outcomes- that is, properties that were passed in, broke even, or sold for just $10,000 above market value- coincide with lower monthly average ACRs.

ALSO READ: Will low clearance rates jeopardise the next auction on The Block?

Melbourne & VIC ACR results

For the week ending Sunday November 8, 2015, Melbourne had a total of 1189 scheduled auctions with
results as follows:

Sold prior to auction Passed in Sold at auction Auction Clearance Rate (ACR)
152 330 616 69%

Source: Core Logic RP Data

Sydney & NSW ACR results

For the week ending Sunday November 8, 2015, Melbourne had a total of 1222 scheduled auctions with results as follows:

Sold prior to auction Passed in Sold at auction Auction Clearance Rate (ACR)
229 321 419 58%

Source: Core Logic RP Data

Buyer’s advocate feedback

the block buyers agents

In preparation for the buyer’s advocates inspection,The Block contestants polished their apartments to earn praise from the buyer’s jury. Buyer’s advocate Frank Valentic raised reservations about Kingi and Caro’s polarising rendered bedhead, but still said he could “have a buyer ready to go” come auction day.

While Suzi and Voni took out the buyer’s jury award for their “entertainer’s paradise”, feedback for deer-in-headlights couple Andrew and Whitney wasn’t as promising. Buyer’s advocate Nicole Jacobs warned that if the contestants don’t restore the consistency of their apartment, she may not have a bidder ready at auction.

For ultra-competitive Dean and Shay, the buyer’s advocates believed they would have buyers bidding against each other when the penthouse goes under the hammer. In particular, Valentic was thrilled by the contestant’s kitchen and the butler’s pantry which “ticked” all the boxes for his interested buyers.

So have the contestants done enough to get the bids flowing at auction? Will they manage to surpass their reserves or will they be skating on thin ice?

What are auction clearance rates (ACRs)?

Considered a key property market indicator, ACRs are typically used to see whether a certain market favours buyers or sellers. Expressed as a percentage, the ACR reflects the number of properties sold at auction within a particular region.

A low clearance rate (60% or below), may suggest that there is low level of buyer interest or demand in the market, and that supply of stock outweighs demand. In this case, it would be a "buyer’s market".

On the other hand, a high ACR of around 75%, suggests that there is a high level of buyer interest and demand within a given market. With a high ACR, this would indicate a "seller’s market."

There’s more than meets the eye

Although the ACR is a key indicator of the level of demand and supply within a market, this metric alone should not be taken at face-value. To improve the accuracy of assumptions made, it’s important to use the ACR with a range of other metrics to get a holistic view of a market.

Additionally, you should consider the number of auctions held within a given month or year, as a high ACR from a low volume of auctions is not necessarily reflecting a strong market, just as a low ACR from a high number of auctions held does not always suggest a declining property market.

The Block Triple Threat auction.Remember that everything is relative, and data should be compared or reviewed over an extended period of time and in conjunction with other market variables.

It’s also important to acknowledge that auctions are not the only method of sale in Sydney or Melbourne. However, it is estimated that approximately 50% of property sales are conducted via auctions in Melbourne’s inner-city suburbs, where all recent series of The Block have been set.

Annual auction clearance rates

Calendar year ending December - houses and units combined

Season Suburb Dec-03 Dec-04 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Jul-15 Oct-15
1 Bondi (NSW) 67.1%
2 Manly (NSW) 45.5%
3 Vaucluse (NSW) 54.1%
4 Richmond (VIC) 71.5%
5 South Melbourne (VIC) 60.9%
6 Bondi (NSW) 72.8%
7 South Melbourne (VIC) 77.7%
8 Albert Park (VIC) 71.4%
9 Prahan (VIC) 69.5%
10/11 South Yarra (VIC)* 67.9%* 67.9%*

*South Yarra figures are for the 12 months to October 2015

Source: APM Price Finder

Season by season analysis

Season 1: Bondi, NSW (2003)

Set in Sydney’s blue-chip suburb of Bondi, all properties that went under the hammer from Season 1 of The Block sold above their identical reserve of $595,000. Interestingly, the average “winnings”, or sale amount achieved above the reserve, was $110,750.

Contestants Reserve Overall Result Auction sale price Winnings
Adam & Fiona $595,000 Won $751,000.00 $156,000
Kylie & Paul $595,000 2nd $747,000.00 $152,000
Gavin & Warren $595,000 3rd $670,000.00 $75,000
Amity & Phil $595,000 4th $655,000.00 $60,000

The auction for season 1 of The Block took place in August 2003 and the monthly regional ACR for the “city and east” region of Bondi was 69.5%, which was almost on par with the 68% monthly annual city ACR for Sydney in August 2003. The successful sales from the season may therefore reflect the strong buyer sentiment and interest in Bondi real estate as indicated by a relatively high ACR.

If we look at the average annual ACR for each suburb of The Block properties, Bondi’s annual ACR of 67.1% is ranked as the 7th highest among all of ACR for The Block properties across ten seasons. However, this ACR is relatively low so it is somewhat surprising that all properties managed to go under the hammer for above market value.

Season 2: Manly, NSW (2004)

We move to Sydney’s northern beaches district of Manly for Season 2 of The Block where auction day took place in July 2004. This time, not all contestants were lucky enough to sell their apartment above the set reserve and as a result, some of the contestants walked away with zero profit.

Half the properties from Season 2 (2/4) broke even and did not achieve a sales price above the reserve. Specifically, Matt and Jane’s apartment sold at market price for $795,000, and for Richard and Steven, the bidding paddles did not raise again after the final $800,000 offer.

Contestants Reserve Overall Result Auction Sale Price Winnings
Jason & Kirsten $795,000 2nd $872,000 $77,000
Richard & Steven $800,000 3rd (tied) $800,000 $0
Matt & Jane $795,000 3rd (tied) $795,000 $0
Andrew & Jamie $790,000 Won $868,000 $78,000

Manly’s regional monthly ACR in July 2004 was 35.7% which was well below the July 2004 44% ACR for Sydney as a capital city. This may explain why two of the properties failed to sell for a profit at auction day.

Interestingly, the average annual ACR for Manly in 2004 was 45.5% which represents the lowest ACR figure for all locations across all seasons of The Block, which could explain why two of the properties failed to exceed the reserves.

Season 3: Vaucluse, NSW (2010)

Enter Vaucluse in 2010 and 75% of all properties (3/4) sold at auction. Brenton and Chez’s apartment had a reserve set at $880,000, the auctioneer placed a vendor bid at $860,000 but unfortunately a higher bid did not follow, passing in the property.

Contestants Reserve Overall Result Auction Sale Price Winnings
Neisha & John $900,000 Won $1,105,000 $205,000
Mark & Duncan $860,000 3rd $907,000 $47,000
Erin & Jake $910,000 2nd $997,500 $87,500
Brenton & Chez $880,000 4th Not sold at auction $0.00

All properties from Season 3 of The Block went under the hammer in November 2010. The monthly ACR for the Vaucluse “city and east” region was 59.7% at this time which is marginally higher than the monthly annual city ACR for Sydney which was 55%.

When determining how the Vaucluse annual 2010 ACR of 54.1% fares against the other annual ACRs for The Block auction markets, it is ranked 9th out of 10. This annual ACR is significantly lower compared to the other averages across the 10 seasons and thus it may signify a lack of buyer demand for high-end properties in Vaucluse at this point in time.

Season 4: Richmond, VIC (2011)

If we rewind to Season 4 of The Block, the auction results for the Richmond properties were dismal. A total of half (2/4) of all properties that were auctioned were passed in, while one of the properties sold at reserve and broke even.

Contestants Reserve Overall Result Auction sale price Winnings
Tania & Rod $850,000 2nd Passed in at $832,000 $0
Jenna & Josh $950,000 3rd Passed in at $901,000 $0
Polly & Waz $840,000 Won $855,000 $15,000
Katrina & Amie $860,000 4th $860,000 $0

The Season 4 auction occurred in August 2011 and the monthly ACR for the “inner urban” Richmond region at this time was 54.2% which is marginally lower than the monthly average of 59% for Melbourne in August 2011. However, considering the poor auction results from this season, it is surprising that the difference between the monthly regional and annual capital city ACR is not more substantial.

Further, the average annual ACR for Richmond of 71.5% ranks as the third highest ACR for all of The Block auction dates and locations which may indicate that there were other external factors that contributed to the disappointing auction results.

Season 5: South Melbourne, VIC (2012)

Auction results in South Melbourne in 2012 were uplifting compared to the two previous seasons. All properties that were auctioned sold above their reserve and the average “winnings” - or sale price above the given reserve- was a staggering $435,750.25.

Contestants Reserve Overall Result Auction sale price Winnings
Brad & Lara $1,114,000 Won $1,620,000 $506,000
Dani & Dan $992,000 2nd $1,440,00 $448,000
Sophie & Dale $975,000 4th $1,330,000 $355,000
Mike & Andrew $966,000 3rd $1,400,001.01 $434,001.01

Going under the hammer in July 2012, each of the properties from this season blitzed their reserve. The July ACR for the “inner urban” region of South Melbourne was 53.0% which is just short of the July ACR for Melbourne at 54%.

Surprisingly, South Melbourne’s annual 2012 ACR of 60.9% ranks relatively low across all the annual ACRs for ten The Block auction locations as the eighth highest, or second lowest ACR.

Season 6: Bondi, NSW (2013)

After two consecutive seasons in Victoria, the All Star series returned to NSW for another shot in the Eastern suburbs of Bondi. This time, all properties from the season sold for a price above their nominated reserve, which yielded a healthy average “winnings” amount of $203,750.

Contestants Auction Order Reserve Overall Result Auction sale price Winnings
Phil & Amity 4th $1,375,000 Won $1,670,000 $295,000
Josh & Jenna 1st $1,375,000 2nd $1,650,000 $275,000
Mark & Duncan 2nd $1,345,000 4th $1,375,000 $25 000
Dan & Dani 3rd $1,355,000 3rd $1,575,000 $220,000

Properties went to auction in March 2013 at a time where the monthly ACR was 66.5% for the “city and east” region, which was slightly above the monthly 65% ACR for Sydney. This demonstrates a relatively median level of buyer demand in Bondi apartments at this time.

As expected, the annual 72.8% ACR for Bondi ranks as the second-highest average ACR for all of The Block auctions for ten seasons.

Season 7: South Melbourne, VIC (2013)

For the Sky High series, all five properties sold for a profit and the average “winnings” amount equated to $256,600.

Contestants Reserve Overall Result Auction sale price Winnings
Alisa & Lysandra $1,140,000 Won $1,435,000 $295,000
Madi & Jarrod $1,310,000 3rd $1,601,000 $291,000
Matt & Kim $1,205,000 5th $1,455,000 $250,000
Bec & George $1,265,000 4th $1,507,000 $242,000
Johnno & Trixie $1,400,000 2nd $1,605,000 $205,000

Going under the hammer in July 2013 in a market with a monthly region ACR of 69.9% which was just above the July ACR for VIC at 67%. Coupled with this, the annual 2013 ACR for South Melbourne was recorded at 77.7% which represents the highest average annual ACR for all of The Block auction markets.

South Melbourne’s 77.7% annual ACR in 2013 is the strongest ACR across all seasons of The Block to date.

Season 8: Albert Park, VIC (2014)

The Fans vs Faves series saw a successful auction day in which all four properties sold for above their reserve prices. The average “winnings” amounted to a sizeable $581,625.

Contestants Reserve Overall Result Auction sale price Winnings
Brad & Dale $1,802,750 4th $2,310,000 $507,250
Alisa & Lysandra $1,759,000 2nd $2,375,000 $616,000
Steve & Chantelle $1,834,000 Won $2,470,000 $636,000
Kyal & Kara $1,872,750 3rd $2,440,000 $567,250

While not traditionally “mortgage season”, the auction took place in April 2014 in which Albert Park had a regional monthly ACR of 64.9% which sat below the monthly ACR for Melbourne of 69% at this time.

The annual 2014 ACR for Albert Park was 71.4% which ranked as the fourth highest average annual ACR for all of The Block auction markets across 10 series.

Season 9: Prahran, VIC (2014)

For the Glasshouse series, all five properties sold above their reserve. However, two of the properties(Carlene and Michael’s as well as Deanne and Darren’s apartments) scraped above their reserve by just $10,000. The average profit from Season 9 was a total of $141,000 winnings.

Contestants Reserve Overall Result Auction sale price Winnings
Carlene & Michael $1,380,000 tied 4th $1,390,000 $10,000
Chris & Jenna $1,500,000 2nd $1,810,000 $310,000
Deanne & Darren $1,370,000 tied 4th $1,380,000 $10,000
Max & Karstan $1,670,000 3rd $1,710,000 $40,000
Simon & Shannon $1,565,000 Won $1,900,000 $335,000

Going to the televised auction in October 2014, the monthly ACR rate of 64.4% for the “inner urban” region sat significantly lower than the Melbourne October ACR of 72%.

The lux suburb of Prahran recorded an annual ACR of 69.5%, which for The Block standards, ranked right smack bang in the middle as the fifth highest ACR for all ten auction markets.

Season 10: South Yarra, VIC (2015)

The profit margin was certainly higher in season 10 of The Block Triple Threat, in which all properties sold well above their reserve where the median profit amount was $766,350. Deanne and Darren’s winning profit of $835,000 represents the highest winning profit in The Block history to date.

Contestants Reserve Overall Result Auction sale price Winnings
Deanne & Darren $1,455,000 Won $2,290,000 $835,000
Ayden & Jess $1,335,000 4th $2,000,000 $665,000
Tim & Anastasia $1,420,000 3rd $2,175,000 $755,000
Josh & Charlotte $1,390,000 2nd $2,200,000 $810,000

Going under the hammer in April 2015 with a monthly regional ACR of 69.4%, it appeared that it was a ‘seller's market’ with a large volume of competing bidders on the day. Interestingly, this monthly ACR of 69.4% compared unfavourably to the Melbourne city April 2015 ACR of 77% which may indicate that there were other factors contributing to buyer demand and sentiment for South Yarra real estate.

Season 11: South Yarra (2015)

Contestants of The New Block 2015 are yet to be given their reserves, and decide on auction order but with a current monthly ACR of 69.5%, and an annual city ACR of 69% for the “inner urban” region that encompasses South Yarra, things may not be all peachy for the Blockheads.

Based on auction results from CoreLogic RP Data, approximately 25% of properties (3/12) were passed in for the week leading up to November 8, 2015.

Currently, the teams are collectively renovating an apartment to fight it out for a cash prize in which they can either slash from their reserve, or use to spruce up their shiny new apartments in preparation for auction day.


While a suburb’s monthly ACR is not the only factor that may spell lower auction results, it seems that an ACR that ranges from 35.7% - 64.4% may lead to less than desirable auction results for The Block real estate. For all seasons whereby 1 or more property was passed in, sold at market or went for just $10,000 above market, the median suburb ACR was 53.5% which indicates that an ACR around this mark may translate to less profitable auction outcomes.

Auction resultsAlthough numerous market factors act as a catalyst in shaping auction performance, there is a clear rationale to suggest that the ACR is a critical factor in outlining the fate of auction.

With just two weeks until The New Block 2015 auction, we’ll have to wait and see how the South Yarra properties unfold when they go under the hammer at the end of the month.

What’s in store for future ACRs?

Our recent finder.com.au survey predicts a strong mortgage season ahead despite a lower ACR, with 1 in 3 of the resident rate experts forecasting auction clearance rates to dip further this season.

Belinda Punshon

Belinda is a journalist here at finder.com.au. Specialising in the home loans and property sections, she is passionate about helping Australians improve their financial wellbeing.

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