Last night’s finale of the renovation reality TV show, “The Block”, has put a spotlight on Melbourne’s heated property market.
The winning couple may have walked away with $655,000 over the reserve price, selling their penthouse apartment for $2.3 million, but local real estate experts say it’s not worth the sale price.
In fact, one buyer’s agent told The Australian Financial Review that private investor who bought the apartment, which was expected to go for between $1.5 to $2 million, must be crazy.
“It’s close to the Alfred Hospital but that means parking is a problem. Anyone who buys a Block apartment is in need of psychiatric help,” said buyer’s agent David Morrell.
At the corner of Punt and Commercial Rd in South Yarra, the three-bedroom apartment is in a block “at the worst intersection” in the city and “has a petrol station view”.
“The buyer paid a premium for it and will now spend the next few years getting over it,” Morrell said.
The runners-up in the competition to renovate the bock at 6/1A Affleck Street sold their sub-penthouse for $2.2 million, $640,000 over the reserve price. The couple who came third sold their unit for $1.735 million, $405,000 over the reserve.
In September, RBA’s head of financial stability, Luci Ellis, said people were willing to pay big prices in inner Melbourne, compared to other parts of the country, if the location was central.
“I think the lesson of past booms as well as recent times is that it’s place – location – that really matters. If we think back to boom–bust episodes of the past, whether in land for new development, railways or prime office buildings, in every case you can see people trying to get their hands on the best locations, to take advantage of whatever future economic outcomes they expect.”
Read more here.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.