What are The Block houses really worth? In the real world, about $2 million less

Last weekend’s auctions on The Block produced some spectacularly disparate results. Steph and Gian won the series, pocketing a history-making $1.75 million, when their house sold for $5 million.

Eliza and Liberty of House 5 made $1.05 million and Kyle and Leslie, of House 1, sold for $130,000 over their reserve.

But Kristy and Brett of House 3 walked away with a comparatively meagre $60,000 and, even worse, Leah and Ash of House 2 walked away with nothing on the day. Their house clocked just one bid of $2.9 million before they made the decision to pass it in. A deal on their place is expected to be inked this week.

While these dramatic results make for great reality TV, they’re also … not very realistic. Does it really cost $5 million to buy a house in Hampton East, a suburb 14 kilometres south-east of Melbourne’s city centre?

Did Adrian Portelli pay too much for Houses 4 and 5? Did Kristy and Brett sell for way too little? Did the House 3 buyers snag an absolute bargain before skipping off to Derby Day in a helicopter?

On an ordinary Saturday in Melbourne, every single one of these houses would have sold for significantly less than what has been paid for them, according to the agents involved in The Block.

Aaron Hill of Ray White Sunbury sold Steph and Gian’s winning home. It had been a fan favourite all along but it also had the largest number of registered bidders on the day.

Even still, he said it would “probably” be worth up to $3 million in a normal market.

SOLD - $5,000,000

20 Charming Street, Hampton East VIC 3188

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“The Block properties are always overpriced on the day; they always have been,” he said. “A house around the corner had previously sold for $3.015 million – that was the suburb record.”

Nick Renna of Jellis Craig sold Eliza and Liberty’s house, which went for $4.3 million on the day. 

“Would these houses have sold for these prices in the ordinary market? Not a chance,” he said.

“First of all, in a regular Melbourne auction market, billionaires are not typically bidding against mum-and-dad investors. It’s very different circumstances.

“House 5 might have fetched $3 million, maybe, but even that price would’ve been an incredible campaign result.” 

Michael Townsend of McGrath St Kilda sold Kyle and Leslie’s house. It went for $3.1 million but, he said, in a normal market it would have fetched $2.6 million.

“If you’re running around with $3 million or $3.5 million pre-approval and going to buy somewhere, bayside, you are not spending that in Charming Street, Hampton East,” he said.

“You might spend $2.5 million there. Maybe. And you’d have to have some emotional connection to the location because it’s considered a B-grade location.”

Townsend said ordinarily, a result in the mid-$2 millions would be a champagne-popping moment, adding that any vendor who got $130,000 over their reserve was “newsworthy”.

“I know it was difficult for Kyle and Leslie on the day because they had just watched their neighbours get millions more,” he said. “But they’re happy. They’re happy with the result and what they won, and the fact is, the price they got is a significant and great result.”