Chart of the month: Big bucks likely on The Block NZ
The Block NZ is back, and there couldn’t be a better time for people to give up three months of their lives in the hope of making some money. The show’s last season in 2019 was a massive disappointment for the contestants, with three of the four properties failing to make reserve at the end-of-show auction, meaning they got nothing for their efforts. The outcome was hardly surprising though, given the Auckland housing market was at its weakest in a decade.
Our Chart of the Month shows there is a strong correlation between house price growth in Auckland and the average profits made on the show. Every percentage point lift in the city’s house price inflation pushes the average sale price on The Block NZ up another 0.55 percentage points above reserve.
Year-end house price growth in Auckland is currently sitting at 17%, but the market’s momentum could see that rate push as high as 23% by September. If we guess at an average reserve price of $1.7m, that result would see the teams taking home an average of almost $245,000 each!