Australia's volatile property market provided both a record-breaking win and plenty of heartbreak during Sunday night's finale of The Block.
After months of production, five sprawling builds in Victoria's Macedon Ranges went under the hammer... or tried to.
The winning team walked away with more than $1 million in prize money, while other teams sweated through stalled auctions before deciding to pass it in.
So, what went under the hammer, and what does it tell us about Australia's current housing market? Let's unpack it.
How much did The Block properties sell for at auction?
All five properties on The Block were set with an auction reserve of $4.08 million and were advertised with a price guide of $4 million to $4.4 million.
Sydneysiders Omar Slaimankhel and Osman "Oz" Said were the first cabs off the auction rank, something they initially thought would be to their detriment.
But they had nothing to worry about, with their property selling for $5,666,666.66 – making them $1,586,666.66 profit.
Their huge margin gave them an unbeatable lead (more on that in a moment) and secured them an extra $100,000 in prize money.
Altogether they walked away with a total of $1,686,666.66, a record-breaking figure in The Block's 19-year history.
But that's where the bidding wars stopped.
Melburnians Tom Calleja and Sarah-Jane Wilson were visibly upset when their property sold for $4.1 million, giving them $20,000 profit.
House |
Team |
Reserve |
Sold for |
Prize money |
|---|---|---|---|---|
1 |
Tom & Sarah-Jane |
$4,080,000 |
$4,100,000.99 |
$20,000.99 |
2 |
Rachel & Ryan |
$4,080,000 |
Passed in at $4,050,000. Sold for $4,249,000.50 post auction |
$169,000.50 |
3 |
Sharon & Ankur |
$4,080,000 |
Passed in at $4,075,000 |
$0 |
4 |
Dylan & Jenny |
$4,080,000 |
Passed in at $4,075,000 |
$0 |
5 |
Omar & Oz |
$4,080,000 |
$5,666,666.66 |
$1,586,666.66 + $100,000 |
In a bid to avoid similar disappointment, the three remaining teams all instructed their auctioneers to pass in their properties as they began to stall dangerously close to coming on the market.
Sydneysiders Rachel and Ryan Carr were able to negotiate with serial Block buyer Danny Wallis (who just bought Omar and Oz's winning build) after their lacklustre auction. Their property sold for $4,249,000.50, making them $169,000.50 profit.
Meanwhile, Sharon and Ankur and Jenny and Dylan's homes still remain under negotiations.
Side note: Who is Danny Wallis? How can he afford so many Block properties?
Danny Wallis is a Melbourne IT entrepreneur and the chief executive of DWS Group, which he founded in 1991.
He's no stranger to Block auctions as he's spent nearly $30 million over the years snapping up multiple properties.
In 2018, Wallis sold a home for $18 million on the Sunshine Coast in what Domain called "one of the biggest real estate deals in Queensland in recent times".
What do these auction results say about Australia's housing market?
"The Block auctions represented so many interesting dynamics about where the housing market is, and the nature of housing demand in regional Victoria," said Eliza Owen, head of research at CoreLogic Australia.
"It is worth noting The Block began filming in March 2022, in an already volatile market.
"By the time the homes reached auction in November, the cash rate was up 275 basis points, consumer sentiment had plummeted, and sales volumes across regional Victoria were trending around 16 per cent lower than in 2021."
Ms Owen said despite these being beautifully presented, well-built homes, it is clear that even premium housing has been impacted by higher interest rate conditions.
"It is generally the more expensive segment of the market that is more sensitive to changes in lending conditions over time," Ms Owen told the ABC, adding there's no definitive reason the high end of the market is more sensitive to rate hikes.
"Some argue because higher debt levels are often required to buy more expensive properties, the high end of the market reacts quickly to rate or borrowing changes," she said.
"There is also an argument that high-end buyers tend to have access to better information around the outlook for interest rates and property returns.
"With the cash rate unlikely to get back to 0.1 per cent, the profits envisioned for these properties at the start of production may have been eroded by rapidly changing financial and demographic conditions."
Ms Owen said the fact that Rachel and Ryan achieved a profit of $160,000 over the reserve from private treaty negotiation "reflects the broader picture of sellers having to change tactics to get the price they want."
"Auctions do not work as well for sellers in a market downturn," she said.
How do softer market conditions explain Oz and Omar's big win?
Ms Owen described Oz and Omar's $1.5 million profit as "an outlier from broader market trends".
"This came back to a combination of factors, including the unique design of the home, the contestants working to find potential buyers who would be interested in the home, and a resulting bidding war between two potential buyers," she said.
"Even in making a substantial gain above the reserve, the winner of the auction admitted he may have over-paid for the property, suggesting the price may not reflect where the market is at."
Are buyers not wanting a 'tree change' anymore?
Real Estate Institute of Victoria CEO Quentin Kilian said there was an "unprecedented increase" in migration to regional Victoria during the COVID-19 lockdowns.
He said the trend has since stabilised, "though regions have not seen any major fall in prices and rental vacancy rates remain extremely low."
"Regional houses have recorded their first fall in median prices since the June quarter of 2020 with 2.8 per cent to $603,000," he said.
"Considering the growth for eight consecutive quarters, this is only a slight correction, as house value is 15.5 per cent higher than in the September quarter 2021."
