The Block’s 2025 auction finale delivered a $3.41m winning sale, but two homes failed to sell under the hammer before eventually fetching $2.15m each. Picture: Supplied/Nine.
Channel 9’s The Block has glossed over a staggering $152m property black hole, despite years of multimillion-dollar auction results.
The extraordinary discrepancy highlights how far the cost of the show’s luxury builds can run ahead of what buyers are willing to pay, with potentially disastrous consequences for any mum or dad watching who tried to tackle a build the same way.
A Herald Sun analysis of 18 editions from 2011 to 2025 found the properties fetched a combined $230.3m at auction.
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Nine spent an estimated $150.8m acquiring the sites, while specialist assessments of construction work, labour, materials and fittings pointed to a further $231.8m in building-related costs.
Together, the land purchases and assessed works came to almost $383m, about $152m above the sale prices paid by high-profile buyers such as Adrian Portelli and comedian Dave Hughes.
Buyers gather for The Block’s 2025 Daylesford auctions, where contestants’ fortunes depended on whether multimillion-dollar bids would materialise. Picture: Supplied/Nine.
BMT Tax Depreciation chief executive Bradley Beer confirmed the company’s lifetime assessments broadly reflected the costs of constructing and fitting out the buildings, rather than their resale value.
He said the calculation left out other development expenses including demolition and financing, making the hypothetical shortfall for a conventional developer potentially larger.
“It’s actually a little worse than what you’ve calculated,” Mr Beer said.
“Developers that use these numbers go bust.”
BMT Tax Depreciation chief executive Bradley Beer says demolition, financing and other development expenses are not included in the construction-related assessments underpinning The Block’s estimated $152m shortfall.
Mr Beer said the network could sustain a different financial model because it made money from television and advertising, not just selling houses.
The $152m figure is a comparison of reported acquisitions, estimated eligible construction and asset costs and completed sales, not an audited loss for the network.
But for purchasers, the gap raises the prospect of securing a home containing work that could cost substantially more to reproduce than the eventual purchase price.
“They’re worth whatever someone pays for them,” Mr Beer said.
This year’s five newly built Mount Eliza properties will add another $29.4m in estimated lifetime deductions, correlating with the cost of creating the homes, for investor buyers, compared with their combined $17.2m auction reserves after Rick and Tayla’s $50,000 reduction.
Courtney and Sev’s luxury kitchen at The Block’s Mount Eliza development forms part of a home with more than $6m in estimated lifetime depreciation deductions.
The living area of Courtney and Sev’s Mount Eliza home, one of five properties heading to auction with combined reserves of $17.2m.
Courtney and Sev’s home at 9 Mackillop Place leads with $6,084,433 in projected lifetime deductions and $279,638 in its first full financial year.
Mr Beer ranked the latest houses among the best he had seen on the show, pointing to luxury inclusions and a kitchen understood to have cost about $500,000.
“They’ve spent a lot of money getting them right,” he said.
However, a costly fit-out does not automatically lift a home’s market value by the same amount, and buyers should not confuse potential tax deductions with cash refunds.
An eligible owner able to use Courtney and Sev’s entire first-year deduction at an effective tax rate of 47 per cent could reduce their tax bill by about $131,400. The saving would depend on their circumstances.
The Block 2026 contestants Courtney and Sev have the highest projected first-year tax deductions of the five Mount Eliza properties, at $279,638 for an eligible investor.
Mr Beer said buyers also had to weigh rental returns, capital growth and ongoing holding costs, rather than chasing the biggest deductions.
He doubted tax benefits alone explained the interest of wealthy Block regulars including Mr Portelli and Danny Wallis, who could also have commercial reasons for their purchases.
“I don’t think their reason is tax deduction,” he said.
Cohen Handler Victoria managing director Nicole Jacobs says serious buyers will judge The Block’s luxury homes on their design, finish and liveability, not their television exposure.
Buyer’s advocate Nicole Jacobs said the Block branding could not compensate for an unsuitable home, with serious purchasers assessing the design, finish and liveability against other luxury properties.
She said finding enough buyers for five homes in the same multimillion-dollar bracket was a challenge, whatever the production had spent on the builds.
MR Advocacy director Madeleine Roberts believes some of The Block’s multimillion-dollar Mount Eliza homes could struggle to find buyers on auction day, with cheaper alternatives nearby.
MR Advocacy director Madeleine Roberts pointed to a four-bedroom, three-bathroom home on more than 1000sq m in Mount Eliza advertised at about $2.3m, roughly $1m below The Block’s reserves.
“The values just aren’t really stacking up with what’s available right now,” Ms Roberts said.
Contestants celebrate at The Block’s 2025 Daylesford auctions, where two properties failed to find buyers and remained on the market for months. Picture: Supplied/Nine.
She expected some of the properties to sell after auction rather than under the hammer, despite hoping the contestants would secure buyers.
“I will be very surprised if they sell on auction day as much as I hope they do,” she said.
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