APRIL 28, 2015
The Block's Greville Pabst: What you need to know before the hammer comes down
As the The Block Triple Threat auction day comes closer, it can be easy to get swept up in the excitement of it all, whether you’re a supporting viewer or a potential buyer. At any auction, it can be easy to make hasty decisions based on the moment. My job is to give clients the facts so they can make an educated choice in terms of their investments.
Regardless of whether you’re watching The Block at home, looking to buy, or even at The Block come tonight, there are three things any potential homebuyer needs to keep in mind at the sale.
The block of Triple Threat is great location, making it highly sought after and a desirable investment. Potential buyer are buying into the luxury lifestyle of the
South Yarra area and given the current market environment – competition is heated. The Melbourne market is highly competitive. You can expect anywhere between 4 and 6 bidders at any auction in Melbourne, particularly in popular inner suburbs. This has meant strong growth for quality properties.
The properties on Triple Threat have high-profile townhouses in the eye line of many investors. The flip side to this of course are discrete investors, looking to spend upwards of $1M, may prefer to keep a lower profile.
The most successful properties are those that have an element of scarcity. This season, The Block has betted on that. There are four properties this season and the townhouses are highly sought after in the densely built South Yarra area. Clever investors always look for the best deal and for a property’s capital growth to span over at least 7 years. Whether the properties go for a good price depends on whether it can bring back an impressive return on investment.
Vendors can make predictions about what the final price will be, but in the end, buyers and investors should be looking at the bottom line.
When buying any property, cost is a huge factor. But how much are properties actually costing buyers?
Banks only supply 80% loans on the bricks and mortar of a property, meaning that furnishing and appliances need to be paid off out of pocket. For The Block, the luxe furnishing and wine cellars for example, means buyers will need to have spare cash set away – for more than just the initial deposit.
For a typical buyer looking at investment properties, they need to consider ongoing costs as part of any investment – whether it’s maintenance, rates or mortgage repayments.
Greville Pabst is a judge on The Block and the CEO of WBP Property, a leading property valuations and buyers advocacy firm.
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