What do The Block 2016 results tell us about Melbourne’s apartment boom?
And just how does Will & Karlie's win rank on the all-time charts?
So last night saw the finale of the 2016 season of The Block. Popular couple Will and Karlie scooped first place, with a total profit of $715,000. But is the $2.6 million bid for their work a sign that Melbourne's market is overheated and needs correction?
Block winners are determined not by the final sales price, but by the gap between the reserve and the final figure. A low reserve on a highly valuable apartment gives you a decent shot, but you also need to consider auction order, since if you go last there's a chance the available pool of bidders dries up and you're left with the cheapskates. A high reserve reflects the value of your work but can scare off bidders.
The table below shows the profit made by the most successful and least successful contestants on every series of The Block to date:
|Series||Top profit||Bottom profit|
|Season 1 (2003)||$156,000||$60,000|
|Season 2 (2004)||$78,000||$0|
|Season 3 (2010)||$205,000||$0|
|Season 4 (2011)||$15,000||$0|
|Season 5 (2012)||$506,000||$355,000|
|Season 6: All Stars (2013)||$295,000||$25,000|
|Season 7: Sky High (2013)||$295,000||$205,000|
|Season 8: Fans vs Faves (2014)||$636,000||$507,250|
|Season 9: Glasshouse (2014)||$335,000||$10,000|
|Season 10: Triple Threat (2015)||$835,000||$665,000|
|Season 11: Blocktagon (2015)||$655,000||$349,000|
|Season 12 (2016)||$715,000||$425,000|
Arguably the modern Block era begins with Season 5; before that, different rules applied and the decade-long gap between Seasons 2 and 3 makes any comparisons difficult. The figures vary widely, but the most evident trend is that the biggest margins have been in the last three seasons. Pedant note: the official winning figure for Season 11 was $755,000, but that included a $100,000 cash prize, which isn't indicative of property value.
Bearing that in mind, the profit figure for this year is the second-highest ever for The Block, beaten only by the Season 10 result of $835,000. So that suggests that people are still willing to pay high prices for property. Granted, there's potentially a halo effect from being on the show itself, though our analysis suggests that making a profit when you sell a property from The Block can be difficult. Even so, $2.6 million is not a cheap apartment.
Perhaps the more telling sign is the gap between first and last place. In Season 10, even the "losers" made $665,000. This year, the final place getters (Kim and Chris) scored $425,000. Still a pleasant sum, but proof that buyers will sniff out a (relative) bargain when they can.
Whatever happens, The Block is certain to return in 2017. The biggest challenge for producers is finding the right building. We suggest checking out our list of Melbourne's next hipster suburbs for inspiration.
Angus Kidman's Findings column looks at new developments and research that help you save money, make wise decisions and enjoy your life more. It appears Monday through Friday on finder.com.au.
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Picture: Channel 9