Photo: ThreeNow
Reality TV show The Block had its final last night and many people aren't happy with the result.
Winners Andy and Nate got a second chance at auction after a very slow round of bidding.
The profits were far lower than previous years, raising questions about what this means for our housing market and whether the reality series can continue.
Ashley Church from the Property Institute gives us his thoughts on the final auction.
Church tells Jesse Mulligan he wasn’t surprised at the outcome as auctions are ineffective in a flat market.
“It’s a good barometer of where the market is at the moment, it shows the market has flattened out and that confidence has disappeared.”
The demands of TV make the auction a logical way of selling properties, but it was not a good strategy, Church says.
“Auctions are notorious in flat markets for being a complete waste of time.
“In a hot market you’ve got competing buyers in the same room, the market’s going up and people will compete and outbid each other.”
In a flat market exactly the opposite happens, he says.
“You don’t have to be a property expert to understand the dynamics of that.”
Next weekend’s election has dampened the market and there is evidence that has happened in previous elections, Church says.
In 2014, the housing market bounced back sharply after the election, but this year may be different as loan to value lending and banks rationing mortgage funds will continue to be factors in the market.
But a crash isn’t likely as New Zealand’s market historically booms then goes quiet for three to five years before picking up again, he says.
