Why The Block auctions were so successful: Greville Pabst
GUEST OBSERVATION
What a great outcome for Channel 9, the contestants, and the owner-occupier buyers that had their hearts set on the townhouses of The Block. Being a part of this series has been a fantastic opportunity for me as I was able to educate the contestants and viewers on what adds value to a property and what the current market expects to see.
But for those scratching their heads at the sky-high takings, here is a rundown of the number of factors that Triple Threat’s success can be attributed to.
All of the properties appeal to the market for different reasons; some of the townhouses were larger, while others were better configured or had cleaner finishes. While furnishings are nice to look at and add to the feel of a room, it’s the configuration of the property that’s most important. Things like open plan kitchens or living and outdoor entertainment areas are spaces that are favoured by homeowners and tenants as they provide a welcoming atmosphere.
Greville Pabst at The Block. Photo: Supplied.
As a certified valuer and buyer’s advocate, many of my clients are investors looking for sage advice on what can be one of the biggest fiscal decisions of their life. The Block apartments provided some very appealing tax depreciation benefits coupled with potentially strong rental income. These factors together meant that if purchased at the right price, The Block apartments might be positively geared. The South Yarra location and scarcity of the property is also favourable and means the properties are likely to benefit from sounds capital growth.
I base value on sales evidence factoring in current market sentiment. Generally speaking apartments and townhouses in South Yarra sell around the $8,000 per square metre to $10,000 per square metre of living area, depending on factors such as building size, location, orientation, car parking provided, accommodation, floor plan and level of finishes. It is good to note that the furnishings are not be included in a professional valuation of a property.
However, not all properties perform the same and without a history of sales performance it’s difficult for me to recommend the properties past a point, to my clients, whether buying for investment or home occupation, which should still be considered an investment. For an investor with a budget of $1.5 - $1.9 million The Block properties would have been a good investment. But over this price I would recommend to my investment clients be more discerning and purchase two or three apartments for the price of a single Block apartment or a single-fronted Victorian cottage on a separate title.
My clients employ me to stand back, assess, strike if the price is right for an investment and refrain from emotional buying. I chose not to invest my clients’ money. It may be a reality TV show but I am dealing with real people's money.
The Block is a fantastic game show, it is fun and we all love to watch it. I look forward to the next series.
GREVILLE PABST is CEO and director of WBP Property Group and a judge on The Block Triple Threat.
Photo courtesy of Channel 9.
