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The Block Houses To Make A Loss

The Block houses even when refurbished have the Herald Sun claiming they will not be making a profit.

The article says:

The four properties in Cameron St, Richmond will be auctioned on August 20, with agents quoting $800,000 to $880,000 for the three single-fronted residences.

The double-fronted property renovated by Melbourne’s Josh and Jenna is being advertised for $900,000 to $990,000.

Watercress Productions paid about $950,000 each for the dilapidated Victorian and Edwardian houses, including stamp duty.

The four couples have each spent more than $100,000 renovating the properties, though that fails to take into account the second storey added to the single-fronted houses, which would have cost upwards of $200,000, pushing their cost to around $1.25 million each.

Advantage Property Consulting’s Frank Valentic said that once holding costs were taken into account, each house would need to raise between $1.3 million and $1.4 million to break even.

“There is no way they are worth that,” Mr Valentic said. “It’s definitely not what I would call a profitable renovation syndicate. But Channel 9 has paid a premium for their TV ratings.”

Biggin Scott Richmond director Russell Cambridge, who is selling Polly and Waz’s property at 37 Cameron St, said Watercress paid above the market rate to secure four properties side by side in fashionable Richmond.

 

 

16 comments

1 Anonymous { 07.31.11 at 5:26 pm }

Uh, what? The producers paid that much when they were in that awful state? They should have just bought some vacant land in the middle of nowhere and had the contestants build their own homes. In fact that probably would have been a better show.

2 Dmc { 07.31.11 at 7:56 pm }

Renovation costs are so high that’s its a myth that you can do what these guys are doing and guarantee a profit.

3 Mama'sMilk { 07.31.11 at 8:17 pm }

I’m looking forward to a renovation show that takes 4 identical kit houses in a new suburban subdivision and makes them stylish … they are so bland these ticky tacky houses and just ripe for some renovating without the derelict house thing

4 Elle { 08.01.11 at 2:18 am }

Would like to see that show myself MM, or something similar anyway.
As for Channel 9 paying $950k for ea house, wow! I know Melb is pricey, and I’m sure they paid more just to get what they wanted but still, given the state of the houses when we first seen them, I would have expected something in the 700k range max.

5 Rocky { 08.01.11 at 6:39 am }

Rod and Waz went to that auction in the same neighborhood and we saw that a fully renovated home that appeared nearly twice the size of theirs sold for 1.3 million at auction. Not to mention the house’s styling was more in line with Rod and Tania’s luxury styling and not student dorm that the judges was encouraging in the beginning on The Block. What was The Block’s judges thinking kept promoting J&J’s aesthetic. What million dollar plus buyer would want that?

That told us that The Blocks smaller houses including J&J’s with their student housing aesthetic would sell at auction for much less. At around 800K to 900K would be about right. As for production costs of buying the homes, of course the Watercress saw them coming when they heard they were buying all 4 and held them over the barrel. They were not worth 950k each un-renovated, they are not even worth that much renovated.

6 PollyB { 08.01.11 at 7:29 am }

McGrath is spot on, Rod & Tania’s taste is so Fountain Lakes, and they got the styling right for that! They are in Melbourne, unless you have underfloor heating, why tiles outside of wet areas? They will be freezing in all but summer. They’re ‘style’ is not only tacky but common for all those mcmansions built the same. And brown and white was fashionable on the first The Block, televised in 2004. Lot’s of time, money and effort for a garish finish.

7 akris { 08.01.11 at 9:26 am }

No block recap for the room judging?

8 Maz { 08.01.11 at 9:31 am }

@Mama’sMilk that idea has already been used. It was called from the Ground Up and screened on Channel Ten on Saturday afternoons laster year. Basically, four couples had to build a GK Gardiner home in a new subdivsion in Lake Macquarie. http://express-advocate-wyong.whereilive.com.au/news/story/happy-homemakers-on-tv-today/

9 Rocky { 08.01.11 at 10:57 am }

I see someone’s mad that they finally dropped some truth on J&J. What many said from the beginning. Who’s gonna buy shabby college housing dressed up?.

The judges brought this on themselves. Trying way too hard to attract younger viewers by over praising J&J and not the million dollar buyers for these homes.

Beat up watering cans, banged up stools as tables, trouble lights hung as lamps, artwork always made from trash. Enough is enough already.

10 seepi { 08.01.11 at 12:57 pm }

Not all million dollar buyers want white walls, beige furniture and shiny chrome accents with a striking black leather chair either,.

Melbourne is a bit funkier than sydney, and these would be starter homes for young couples, or small families I think.

11 Akris { 08.01.11 at 1:17 pm }

Starter homes at almost $1M???!? Gosh I hope not…

12 Rocky { 08.01.11 at 1:34 pm }

Not a starter home for 1 million. The economy has never been that good, even before the recession. J&J furnish theirs like a starter or student housing.

13 AJ { 08.01.11 at 3:33 pm }

Wow. I figured Channel 9 would be taking a loss, but I didn’t think it would that much.

I’m not particularly surprised and given the teams only really renovated 2-3 existing rooms and otherwise have been tasked with simply finalising the fit-out of newly created rooms, I have to wonder (like others) whether it wouldn’t have been just as interesting (and cheaper) for them to build four new homes.

14 George { 08.01.11 at 6:49 pm }

I just don’t get it..spending millions on buying 3 homes right next to each other..what do you expect!..owners had tv execs in the bag..demanding as much as they wanted! Want reality interactive gaming TV..check out mind blowing concepts visit http://gstingas.blogspot.com/2011/07/new-television-shows-for-2012.html. or George Stingas Concepts (facebook)

15 seepi { 08.01.11 at 10:21 pm }

I still think they are starter homes for up and coming dink types – lawyer couples etc.

who else is going to buy them – seriously rich people don’t want such tiny places. Whereas the bright young things who want to live int he inner city and have high incomes could do it.

16 Premium Offer Block Chambers { 08.04.11 at 2:58 am }

[…] The Block Houses To Make A Loss | reality ravings The Block houses even when refurbished have the Herald Sun claiming they will not be making a profit. The article says: The four properties in Cameron St, But Channel 9 has paid a premium for their TV ratings.” Biggin Scott Richmond director Russell Cambridge, who is selling Polly and Waz's property at 37 Cameron St, said Watercress paid above the market rate to secure four properties side by side in fashionable Richmond. […]