Can first home buyers afford The Block? The numbers exposed

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Channel 9’s The Block finale once again cemented its status as the reigning monarch of home-building reality television.

Yet, beyond the drama and design, this year’s season offers a compelling case study: could a first-home buyer realistically afford a slice of Block luxury? The numbers, as it turns out, paint a rather stark picture.

With reserves set more than $2m above the Daylesford median house price, there was a palpable tension and a desperate scramble behind the scenes during the finale to ensure contestants didn’t walk away empty-handed.

Despite this high-stakes environment, and with billionaire Adrian Portelli notably absent from the auction fray, the sale prices and reserves for the Daylesford properties are widely considered to reflect genuine market value for this specific, high-end segment.

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There was plenty of concern among contestants as the auctions unfolded. Picture: Channel 9

Aaron Scott, co-founder of the real estate agent comparison service bRight Agent, affirmed this sentiment, noting that despite some criticism that the reserves were set too high, “the agents got it pretty right”.

“Given billionaire Adrian Portelli didn’t participate in this year’s auction to wildly inflated the purchase prices and ensure the team “his wife likes” won, it’s fair to say that the house reserves and final sale prices closely reflect reality for this high-end market in Daylesford, Victoria,” he said.

“Furthermore, given that some houses sold and others were passed in, it’s fair to assume that the market value is reasonably close to the reserves of $2.99m.

“So $2.99m is the fair price that a First Home Buyers would have to pay, if they wanted to secure a Block house.”

Beyond the hammer: Why The Block’s $2.99m homes are out of reach for most

However, the consensus market value, hovering around the $2.99m reserve, immediately places a Block home well beyond the reach of the Federal Government’s 5 per cent deposit/No Lenders Mortgage Insurance scheme, which caps property prices at $950,000.

While a first-home buyer could still proceed with a 5 per cent deposit, they would be liable for LMI, adding a significant layer of cost.

While the $2.99m reserve was deemed a fair reflection of the market for these bespoke properties, the auction itself proved just how challenging that price point was.

Only winners Britt and Taz saw their house soar, selling for a remarkable $420,000 above its $2.99m reserve.

Britt and Taz’s wellness inspired back garden. Picture: Channel 9/9Now

For the remaining teams, however, the battle to draw bids with a ‘three at the front’ was an uphill struggle.

In a stark demonstration of market resistance, two of the five homes were ultimately passed in, with Han and Can’s property failing to attract a single bid.

This outcome underscored the tightrope walk between aspirational pricing and buyer appetite, even in the high-stakes world of The Block.

To even get a foot in the door of one of these coveted properties, a first-home buyer would need to conjure up a substantial sum.

A 5 per cent deposit alone would set them back $149,500.

On top of that, the LMI would add another $141,000 to the initial outlay.

Emma and Ben’s winning backyard. Picture: Channel 9/9Now

Then comes the unavoidable stamp duty tax, a hefty $178,000, alongside approximately $5,000 for conveyancing and other miscellaneous fees.

“Our first-home buyer better have won a few Block challenges along the way, because they’re up for a cool $473,000 just to walk through the front door,” Mr Scott said.

But the financial journey doesn’t end with the initial payment.

That 5 per cent deposit leaves a substantial 95 per cent loan – a hefty $2,840,500 that still needs to be repaid.

Britt and Taz incorporated local Indigenous art on the garage door. Picture: Channel 9/9Now

Scott clarifies a common misconception: “Some people mistakenly think that under the Government’s 5 per cent deposit scheme, the Government will kick-in the extra 15 per cent and you’ll only need an 80 per cent loan,” he said.

“That’s not correct – if you only have a 5 per cent deposit then you’ll need a 95 per cent loan, which are typically much more costly.”

From aspiration to actuality: The Block’s unattainable luxury for new buyers

Considering a 30-year principal and interest loan with a major bank like CBA, at a rate of 6.99 per cent (given the high loan-to-value ratio), a hypothetical first-home buyer would be facing monthly repayments of approximately $18,879.

This would be a relentless commitment, every single month, for the next three decades.

Over the full term of the loan, assuming no changes to interest rates, the buyer would pay over $6.7 million for the privilege of owning a Block home.

Han and Can took a gamble with their statement torii gate, which the judges thought would polarise buyers. Picture: Channel 9/9Now

A significant portion of this – over $3.9 million – would be in interest payments alone, an amount that actually eclipses the initial cost of the house itself.

For the average Australian first-home buyer, the “reality” of The Block remains a distant dream, firmly entrenched in the realm of high-end property investment rather than an entry into the housing market.

It’s a compelling reminder that while the show delivers aspirational design, the financial reality of such properties is a world away for most.

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