Mark Errichiello on What Really Happened at the Daylesford Block Auctions

In this episode, we go behind the scenes and under the hammer at the Block 2025 auctions, a spectacle where reality TV meets real world market forces. What really happened before and after the cameras rolled? Were the bidding wars as genuine as they looked?

And what do the results reveal about biopsychology, auction strategy and the broader property market?

To unpack it all, we're joined by Mark Ericiello, a licensed buyers and vendors advocate with decades of on the ground auction experience, including bidding at the Phillip Island Block Auctions of 2024 and returning as one of the bidders this year at Dalesford.

We want to know what's authentic, what's orchestrated and how did the producers get it all so wrong this time? Welcome to the elephant in the room. This is the podcast where we love to talk about the big things in property that never usually get talked about.

I'm Veronica Morgan, real estate agent, buyer's agent and buyer's agent mentor, co-host of Foxtel's Location, Location, Location Australia, author of Auction Ready and co-host of Your First Home Buyer Guide.

Hi, I'm Chris Bates, ex-financial planner and mortgage broker, currently ranked number three in the annual MPA Top 100 Mortgage Broker Awards. Before we get started, everything we talk about today is not personal advice, and we recommend you engage the services of a licensed and experienced professional.

Our guest today is Mark Eric Yellow, co-founder and director at Master Advocates, a licensed buyers and vendors advocate who spent decades in the trenches of Melbourne's auction scene.

Having attended and analysed every block auction since the early seasons, Mark brings a candid insider's view of how this year's Dallaswood finale blurred the lines between competition, construction and pure theatre. Great to see you, Mark, and I think this is going to be a bit of a fun conversation.

It certainly will be. And thanks for such a kind introduction. But hi, thanks for having me, Veronica and Chris. Great to see you both.

Good to have you on here, Mark. I mean, for those who didn't watch the block or didn't tune into the auctions, I mean, can you give us an idea of how it actually went? And from my understanding, it didn't go very well.

Yeah, well, from the production and contestants' point of view, it didn't go very well, but there were definitely a few serious bidders at what I believed was a fair market value.

So a few key factors at the top were, I feel personally, they were quoting very high to begin with, which sometimes happens in regional sales, but for the types of properties, a mammoth

effort to try and sell five similar properties, five similar blocks on one street, identical floor plans all in one day in a town which never really hits that level, close to $3 million at best, and getting that result in one afternoon's a big effort.

But then they quoted fairly high to begin with, as I mentioned, probably should have been adjusted early on during the campaign, whereas at the auction day, it's a little bit late. Once the first auction sold above expectations, that was a nice enough property.

As someone who sort of tracks the property market, right, I mean, does it also give us a bit of a canary in the coal mine here of the dangers of investing and also renovating in regional markets and producing a scarce, highly priced product in these markets and the dangers?

Is that some of the learnings you take? Are they just going to go straight back to the capital cities now? What were some of the learnings you saw?

Yeah, I'd say, look, Dalesford's a beautiful place. You just got to get your pricing right. So, you know, it's a nice place for a retreat, good for getaways, good for Airbnb. I've gone there a fair few times with family over the decades. They will, should always change locations and regions.

And they're going to Mount Eliza next year, which is Bayside. It will have a different, Bayside in Melbourne will have a different hype and people may be willing to stretch a little bit more for that owner-occupied sort of dreamscape getaway waterfront.

Whereas Daylesford, you've got lake precinct and these properties weren't close to the lake. Like you're about a 10-minute walk to the main activity centre on Vincent Street and where you were positioned, you were opposite some industrial, some local parkland. Yeah, opposite parkland, that was heritage forest estate.

That was sort of an adjacent view. And there was a brand new housing estate coming up behind, which not everyone may have been aware of, right to your back fence, high density.

So it really wasn't in prime part of town. And they're really asking for sort of almost four times the median price. in the area and they've got five properties that they're trying to flog in one afternoon, all trying to get four times higher than the median.

So I guess that is a huge ask in any market. So I guess you could argue that they got three away, didn't they, under the hammer? And you could argue maybe that's actually good results.

Yeah. In hindsight, the levels reaching over $3 million was a good result to get three in one afternoon. And you've got one concentrated group of buyers and it is reality TV. You're attracting millionaires. We're not talking about where they pitch trying to get affordable housing for mom and dad investors.

I don't deal with many mom and dad investors spending $3 million. So it's a different market. And there were some bidders, even when the one that passed in where we bid, there were bidders very close to the reserve price, the initial reserve price.

And what wasn't good optics on national TV and for the agents were we're getting close to $2,950,000, $2,970,000, and they paused the auction and

It speeds up a little bit in TV land, but you've got vendors, which being the studio, giving the sales agents instructions to increase the reserve and put in a vendor bid an extra $130,000 above the top bidder on the day, which increased the reserve by $110,000 from where they were setting it in hindsight, looking at it on telly.

Wow. So, I mean, that can happen during an auction, a normal auction. The vendor suddenly starts thinking, I'm not that motivated to sell, and they put the price up. But, I mean, overall, though, how different is the block auction environment from a normal Saturday auction?

And what does that say, I guess, about how emotion drives bidding? But there's also the vendor behaving in a way that most vendors don't behave and controlling the agent in a way I think that probably most vendors don't control agents either. Yeah.

Would you agree that that all plays into a really different environment?

Yeah, I'd say very rare for vendors to behave that way in a real life environment. The auctions do flow in the correct way, but I think as far as live, the way they pre-record them, but they're happening live.

If they pause them for a little bit to take instructions, they might speed that up on air later, the actual break. But everything, you've got consumer affairs standing there. Everything's happening within legislation and within vendors' rights. But that point you made about

instructing agents in a different way, agents probably feeling the pressure to just say yes and go ahead with the instructions. Whereas in my past career in sales, that's happened once or twice where vendors not reading your room, not listening for the market and giving instructions that aren't realistic.

when you could make a good sale at above fair market value on the day. And sometimes agents would just say, okay, well, let's agree to disagree and part ways and withdraw rather than moving on. And the rhetoric in the news wasn't very fair to the agents either.

It's really difficult. I've been a selling agent too. And I know when you've got a vendor that sort of goes a bit rogue during the auction, that is really difficult. You are under the pump. You've got buyers there.

You've had conversations with those buyers to a certain level that you've had the same conversations with your vendor as long as you're a good agent. And hopefully what you're trying to do is build a competition and hopefully bring the two together.

But when you've got an vendor that then goes, well, I'm not happy with that anymore and I'm going to increase my reserve, there's also under-quoting legislation. There's all sorts of legislative pressure. You've got Consumer Affairs there, as you said, who are the regulator in Victoria and

and you've got cameras on you that can recording and then broadcasting how you are reacting to that owner sort of making these demands.

That must make very, like you say, it's a bit unfair on the agents, but also a lot of buyers in these circumstances, if this does happen off camera in a normal auction, The buyers turn around and say, oh, the agent underquoted.

But sometimes the owners will just take you by surprise as an agent, don't they? I mean, just because the reserve ends up being a lot more than the guide was doesn't necessarily mean the agent's underquoted, does it?

Yeah, that's true. That can happen in that scenario. And in this scenario... They quoted very high and then they set a reserve just below the bottom end of the estimate guide. And then they increased it as they needed to in the auction. So it was sort of, was it premeditated or not?

That scenario could happen and it's happened in the past on the show, but it's a bit on the nose. And really, if you talk about market value, we've got a public auction, we've got two or three buyers.

20k shy of the reserve all willing to compete just under 3 million well that's setting the market opinion and the market value in my belief they can choose not to take it and that's what happened.

Obviously you represented Adrian Portelli I believe at other auctions and you know he had unlimited cash and he was willing just to spend whatever and it became a little bit of a fast right because at the end of the day it's not really like a true like auction and you've got these bidders that are

buying things for you know like do you think that this was just the most real auction out of the block and this is what it should be like and you know and i think this is this is what people really want to say i mean it wasn't great for the contestants right but this is just the real reality of a building you know and renovating and it's how hard it is to make a profit and i think other seasons they sort of lose the point right because when it does go for prices that just wouldn't actually get in the marketplace it starts to yeah people start to lose interest do you think that was a good move by channel nine i think that

Well, it's a fair comment because yes, in the past, I was fortunate. It was a great experience that year, 2024 with Adrian Portelli and renovating and trying to flip a property in most markets is a risk in a short period of time, right? You're doing it in a very fast period of time.

You're spending premium dollars, like you're setting the stage for premium property. They're only about 36 squares, but you look at all the other pressures in the market, trying to quantify securing the land, getting the subdivision, getting the structures up, getting the fit-outs done.

A little bit different with reality TV, they've got all their sponsors and materials come in and trades. But if you quantify it on a retail value and then try to flip it for a profit, very risky. And this was a little bit more real this year.

People were probably pulling, you know, cooling the jets a little bit when it started getting close to 3 million, I think the majority of buyers. And there's been some big sales in Dalesford over 2.5 million, but maybe better positions. This was probably on the fringe of a prime location. And it's also subjective.

Like when I participated in 2024, It's the purpose, what you're acquiring it for. Sometimes you're willing to stretch a bit further because there was a different purpose afterwards. It was to acquire the lot and now they're still in the system. There's a big giveaway.

Someone won, took the cash instead of the property and there's still giveaways happening now where all five are going out. I guess it's a different playing field with different buyers and big budgets.

Yeah, I mean, at the end of the day, the block's not so much more than just the auction day, though, right? Like you say, it's learning about sort of design trends, you know, latest materials, more reality TV than actual reality, right? So that's what people get wrapped up in.

And the auction day is just the final event. But I do feel like it is kind of a competition, right? So I feel like And there's definitely been times where people have thought it's so easy to flip, right?

When the blocks numbers have just gone through the roof and people just start to get that overconfidence. And all of a sudden, we've got a nation of flippers that, you know, and we've had those flipping booms in the past, haven't we?

Yeah, yeah. And look, I had a few good years in property, even when I was in sales, where there was trends, even people... getting plans and permits and flipping property or renovating quickly, quick refurbishments and making a profit in less than a few months. I think that's a big on area now.

And we've got pressures with even construction and tax. I mentioned in a recent article, supply and actually delivering new stock to the market, building costs, holding costs, interest, all of that. It all feeds into the end purchase price that has to be passed on. And that's what's making property less affordable.

But these people are buying fully furnished houses, so they're paying stamp duty on the dining table and the couches and the artwork and stuff. I find that quite outrageous. But last year, you bid on Phillip Island and you did make a name for yourself as a decoy bidder.

What was the strategy behind that?

I actually had been introduced from some people that knew myself in the industry and some of Adrian's people that made an introduction to us just a few weeks before.

And so the strategy was very clear that it had to be operating anonymously, keeping the identity of the client protected until it was all revealed or successful. And the strategy was to purchase the lot anonymously. And then later revealed, obviously, the strategy was to put through his quite unique business model, LBCT Plus.

And so the reason to purchase one, at least myself, and bid against him on a few was exactly, as you said, going covert and throw some of the other bidders off with big pockets and big purses so that they wouldn't, out of spite, just compete a bit or work out what was going on.

And it worked. It doesn't always work. I've done it a few times for general buyers when we're just buying one property, but

That was definitely a different beast where you've got the same people questioning you in between each auction as they're getting recorded, who you're acting for, and the same people competing house to house.

So back to Dales, Fido, you said that these results hint at where the real market's heading. I mean, what signs stood out to you about buyer sentiment and confidence?

I think that when you talk about even social proofing, even if a few buyers had a bit more money in the pocket, when people started to slow down and draw their bids back below $3 million, everyone started to follow suit. The confidence started to drop.

Then the energy in the room starts to drop as well. Because you're seeing people witness like the first one go pretty hot to 3.4, just over 3.4.

And then when they start passing in or struggling, and as well, I think the buyers that were left over, there were a few other buyers agents in the room as well. People probably scrutinizing values a little bit more and feasibility more.

Funny point you made about the stamp duty on all the furnished items. They were mentioning that there's close to some of them $4 to $5 million of depreciable items and you've got high-end products, wine sellers, stocks and cars and couches and all of that.

Do you need it all or would you sell it? But paying stamp duty on it, it's a different ballgame.

Yeah, it's a 6% premium on everything straight up.

Well, you're there if you love the property and it's your dream home. You've got it. You just walk in and everything's there, but it's still a lot of coin.

I mean, Chris's point earlier about maybe this most recent one and maybe the first one were the most honest in the sense that it had real buyers on it vying for individual properties.

Whilst we can say it's reality television, at the end of the day, unless you've got someone like Adrian Patelli, normal people are trying to buy these properties. I'm at a loss.

I didn't watch this series, but I have watched some of them in the past, and I'm really at a loss because I think they just look like they've just gone up so fast. And that makes me very nervous, just quietly. So I'm personally at a loss.

But the client that you represented this time, I know you can't tell us specifics about them, but just broad brush, what type of buyer wants to buy a property like this?

Yeah, I can't say who the client was, but it was a fair opportunity. And even at that level, the reserves were probably already above a fair level, in my opinion.

Maybe I'm too conservative, but when I'm looking at location and property type, can we get a different spot, a better location, similar house without all the other bells and whistles and come off a few hundred thousand dollars better?

And if I'm confident in that, that clients usually agree, we come from a similar mindset.

Because I guess it's always been my concern on that show. When you've got buyers advocates really just want to get their face on television and show how good they are at bidding. I wonder how strategically are they operating? Are they actually advising their client on, well, is this fair value or not?

Or really going into the depths of why do you want to buy this? Or are we just all wanting to be on television or being caught up in the showmanship? And, you know, like I know you and I've known you for many years. I know that you're a serious advocate.

You're not one of these people that goes out there like a show pony. However, you're there, you know, like it's so how do you feel about that?

But I'm probably more cautious because of that and my nature and the way it can be perceived. And I feel that anyone can bid. Sometimes the silence is golden. If the opportunity is not right and the price is not right, sometimes it's wiser just to walk away. That's reading the room.

But having done your homework, you know when to bid confidently or just sit back.

Yeah, I mean, that's exactly the point, right? Are these great investments stack up on their own two feet, regardless of the show? Because the show comes and goes, right? It's all hype today. You buy a property, the investor takes out the mortgage or they...

It's like unless they've got unlimited cash and they don't really care about investment returns and they just really love this place in Dalesford and they're just going to use it for holidays.

And there are obviously investors out there, but most people are like they need to make sure they get a return on their investment, right? And even things like land tax over there, there's just a lot of costs. But I mean, you're right. And these properties, they could Airbnb really well.

They could get a lot of depreciation on them. But there's going to be a price where you think, hang on a sec, this is just not worth it. I think, you know, a lot of buyer's agents on those shows, it kind of gives the buyer's agency a little bit of a,

a challenging name right like it's it's like yeah i can help you buy at auction but that's a very small slither of what a value of a buyer's agent right a lot of the values in actually helping them assess is this the for investors particularly is this a good use of cash and um yeah is that how you sort of approached it mark like you had to say the clients look i'm happy to represent you but

you know, I'm only representing you, I think, fair values at X price. If you go above that, this is your sort of obviously doing it for a lot more personal reasons rather than investment decisions.

Yeah. Well, and it's well said, Chris, because you'll give your advice of where I would tap out personally and you can show data to support that. Or if this is trying to set prices in the region, then it's a little bit of uncharted territory as well. But again, they're on their own.

If they want to pass that point, and they're taking a little bit more risk. They've got a lot of cash and they don't care about the cost of doing business.

In time, everything will have growth once all the depreciation's gone and the hype of, even if it was Airbnb, say, staying in a Dalesford block home, they will have some hype and benefit for a while.

But I think in time, Melbourne has got some growth, but if you can't play that game and take that risk to waste and you're forced to sell a Then that's a big haircut you're going to take in the loss and stamp duty and everything else.

And land tax isn't at a low level in Victoria when you're playing with those type of dollars. Probably less risk when you're buying older investments and houses under a million dollars in sub-suburbs closer to the metro that you're spending over $3 million. It's a lot of land tax each year.

I haven't done the numbers. I haven't read any articles either, so I'm putting you on the spot here. But has anyone ever done, like it'd be quite simple to do, like the block performance, you know, like people, the purchase price, the growth they've made, how much underperformance in the market?

Because you've got addresses, you've got sale prices, like it'd be actually quite easy to do it. Have you ever compared like how the performance of block

properties goes yeah retrospectively it'd be a good exercise probably interested in doing that myself now but because they've all been in so many different regions i'd probably look more in the suburbs at a micro level and those similar properties

There's a lot in Melbourne. I mean, I spend a bit of time down in Melbourne at the moment and I'm constantly walking past buildings and going, oh, remember that one? It's sort of everywhere. So what process, I know what process I go through when we're pricing a property for a client.

But when you're trying to price a property that is meant to set a record, is meant to be more than really is expected for an area, but also is full of furniture, like what other factors do you have to take into account when you try to say, well, where's fair value?

Yeah, and like the furniture I take, all the furnishings and inclusions I take with a grain of salt as a bonus if we can purchase a property at where I value land, location, property type and the fit out and try and quantify that first where there's no comparables. And the designs, they're reasonable.

Nice floor plans, nice fit outs, good structure. But yes, with all those extra inclusions, I don't get too excited about them because they're going to depreciate pretty quickly.

They're nice to have if you want it all and going to live in there or rent it out, but I'm not going to put a great deal of value on it myself.

Okay, so you pretty much price it as if they're empty.

Yeah, and put a little bit of cream.

Where I'm saying some comparables, for example, were the 2.5 to 2.9, if our client was going to go up to the 3 mil or just over, then it's putting a little bit of cream on for all the extras you get because the depreciation schedules are provided with the contracts.

And you can see, okay, if I was going to buy all that now, that's probably what you pay at a retail value for all of that stuff.

I'm on a personal mission to help more people make better property decisions. You know, most people don't realise that they can cost themselves hundreds of thousands of dollars over the medium to long term when they make property decisions without all of the information that they need.

And what I do is help people with tricky real estate problems, which often masquerade as simple questions like, should I sell my investment property because the interest repayments are hurting? Or should I buy before I sell? Or the other way around.

You can connect with me and access all of the tools that I've created to help you make better property decisions at veronicamorgan.com.au. And there you will find resources for first home buyers, details about my buyer's agent mentoring program.

You can connect with my Sydney based property management and buyer's agency teams, Australia wide vendor advocacy, or ask me for introduction to the small group of buyer's agents that I would personally recommend across the country. That's veronicamorgan.com.au.

If you're considering a property move such as buying your first home, upgrading, renovating or investing, the team here at Alcove would love to help you think through your decision and get the finance right. Please go to alcove.com.au to reach out. Mark, do you think the... They're doing Victoria, right?

And Victoria changes rules around land tax. I mean, the block's also buying these things ahead, right? They take the risk. Yeah. Yeah, and they're probably doing it years in advance. I don't know. I haven't looked at this stuff, but I'm sure they're buying, you know, this 2026 site, you know, 2022, 23.

Like, you know, there's got to be a little bit of- They're not panicking and buying 2026 now. Yeah, that's right. And so, like, there's been a massive change down in Victoria with land tax around, and that absolutely makes it much-

Yeah, for your second homes, right, you see the Mornington Peninsula, like it's absolutely much tougher market down there than it says in the, you know, the first home market rather than the second home market.

Do you think that's also shot Channel 9 in the foot a little bit that they basically rules out a lot of second holiday home buyers just because land tax has just gone up so much?

The sentiment changing in that time when you're buying, I think in the past, I wasn't ever involved in the acquisition side. And there's been people that have been more close to that.

But if they're buying two years out and Melbourne's had a volatile market for a few years, we're just seeing some daylight now and some improvement, right? But you've got the vacant land tax on vacant sites as well. So the one they've next year's season, there's risks there.

And that's why developers do put out a bit of risk and vendors that are looking to rebuild and resell. So it is something to consider in what the expected purchase price needs to be. But their circumstance and the contestant's circumstance, without wanting to seem crude or rude, it's not our concern.

It's not our purchaser's concern. We're going to look at the best market value and opportunity for our purchaser on the day.

I mean, over the years that you've been watching the blog, what would you say has been the biggest strategic moves or missteps you've noticed from the agents and the buyers advocates along the way?

I wouldn't say moves in specific seasons, but I think points mentioned before that some advocates in the past had gone in hot and heavy.

Maybe they got caught up in the moment and the excitement and if the clients did have big pockets to just go for it and make sure they won quickly and push buyers back. I think even this season, Some advocates in the room, I noticed that didn't bid at all as well.

It probably started to calm down a little bit and approach things with a bit more level head. No one was going too crazy. There was maybe a two-horse race on the first one going a bit hard, but after that, it was pretty cool and calm.

I mean, there have been those buyer's agents, right? They've obviously got the marketing benefit from it, you know? Yes.

I'm not going to say who and, you know, it doesn't take a rocket scientist to figure it out, but I don't know if it's really, it's like when buyer's agents say, I can buy fast, I can buy a lot off market.

It's like, you've got to be careful you get your pitch right for the right type of customer. I don't think being a block buyer's agent is the best marketing strategy.

I don't know what you think about that, Mark, but I mean, obviously you've gone on the show, but, you know, attaching yourself to a show like that, because it's not really reality of, and obviously the best,

out of 11 million dwellings we've got in the country, I think you can find better value for money.

Yeah. And you're right. There's a lot of buzzwords going around in advocacy and it's not always the best deal or the best strategy to sort of pin yourself against.

And even with the block, if I'm called upon and I think it's right and I'll give my advice and act, but it's not something I went out chasing. It was virtually the first time it was a very fun experience with Adrian Portelli last year.

And I always like adopting a little bit of strategy and that's fun to execute. But it's not the prices I would say, let's go out and shop and be happy spending.

It is an interesting thing because they pitch the buyers advocates almost like show ponies, you know, almost like we just sort of, I guess they've always had buyers advocates go through and critique the properties through the years.

And so give them some good advice in terms of what buyers want and all the rest of it.

But when it comes to the actual auctions, there's all that drama of calling the client, you know, when it's not at reserve and you're calling the client and pressuring them because somebody else has got a high bid.

And it's all that sort of stuff, that theater of that, that bothers me and really concerns me because I certainly do not do that when I'm bidding at auction for a client.

And that's one of the reasons I can't watch the block auctions, actually, because there's that theatrics that I really can't stomach, really. It upsets me.

I agree totally. I refuse even with clients. And it would really need to be, say, a client that hasn't been totally upfront with their budget and that we've exceeded a price that I said I want to tap out of.

They initially agreed to tap out of it, that I would ask for some privacy and go out and call. But I would say we shouldn't be discussing price or hesitating in the moment. It actually gives... Other buyers, more confidence.

It's in doubt a signal that you're tapped out and that might be another thousand. You're just pushing the market level up, right? And if you miss out on this one, the next one you go for, you've set a new benchmark that's higher. So you make a noose for your own neck.

Mark, you've watched the show so many times. And where's the ones that, if you were going on the block and you had to sort of renovate, how would you think about it? Like what would be like Mark's renovation strategy?

Like if you had to sort of, your block strategy, how would you go about it?

You can find within the footprint that they design and provide to you as well and budgets.

We've even joked with myself and my wife, Michelle, before if we went on contestants and she said she definitely would never go on any show with me because she's very fast and almost like an engineer mindset and I'm more of a dreamer.

So I'd probably blow the budget out completely, especially when it's not my money that I'm playing with.

So when I'm given the budget, but I try to stay quite neutral and play with the floor plan or redesign it where I can to be appealing for a broader market and where we can get access to a few of the toys.

And they've got these huge Vintek fridges that come up as prizes and things like that. I really like some of them go in with a theme like this year, the one that did actually get the highest price first off. They had like a wellness theme.

So all the extra products they got were the day spa, things you can buy. But if I'm going to spend extra on those products, it actually works well in a property. But most of the stuff's the new materials that you get access to.

I reckon they'd get a limited range of materials to choose from, from all the providers and sponsors. So you're going to have a limited range of what you can do.

Yeah, I mean, the key things, right, is your market, right? Like that's just so like buyer's agent in your blood, knowing exactly who you're selling to, making sure it's the market's actually got cash and is actually willing to emotionally invest, right? I think that, I mean, the themes are pretty dangerous.

The theme's a dangerous one, though, because you've got to make sure it matches, right? You don't want to do the theme that it looks cool, but ultimately people don't want to pay a lot of money for it. And I think that's obviously blown up a few people over the years as well.

It can, but I don't know if it's a deal breaker. Yes, when you're talking about the space and the footprint, when you're changing that too much as a theme, that's dangerous. Or the cosmetics, there's a cost in that.

But when it's furniture and we're just putting in gym equipment or couches, it's not a big deal to go crazier and... So at the deal breaker, someone can sell that and put something else in. I think considering the market in the location is important, right?

Because when you're going from Bayside right through to regional Victoria and Highlands, it's a very different marketplace. So you've got to consider that.

Yeah, you can get all your finishes wrong and the whole style of it, it just doesn't appeal to those local buyers. But one of the other things from block auctions that I've watched over the years that they fight about and stress about is the order.

And I know when we're buying property at auction for clients and when the in-rooms auctions, which is sort of what this is in a way, I know the order matters because I know that the agents will structure the order of events in one of those auctions based on how popular the

they think or how well the auctions are going to run. So, they're going to want to start it off strong, but they are not going to use all their best ones early because they want to keep people in the room until the end.

So, where their property sits in the order is quite telling for us. But at the block, it's a bit random, isn't it? They either win prizes to be first off, cap off the rank or last or whatever. Do you have any opinions as to How the order matters.

Is it true that all the best buyers basically go and blow their budgets on the first one and then you've only got one buyer left by the end? Or is it that some people do hold off for the better property? And how do they assess that?

I think if you've got your eye on a certain property, you're going to hold off as a buyer. You're not going to just buy the one that's first or second because of the order strategy.

In-room auctions that you talk about, I think it is much more important, the structure, because you're not going to have, say, five houses on the same street that are similar out of the group of 10 auctions that they're doing on that day.

Whereas with this, certainly the similar properties, and then if there's a crowd favorite that's been popular during the sales campaign, That going first is definitely, it's proven in the past that's going to take off. But the way they select it is different.

They either get them to select it amongst themselves as contestants, the order, or they draw the order out of a hat, which is pretty dangerous as well. Yeah, this year it was, even though the floor plans are all identical, the one that went off first was aesthetically, I didn't mind it.

I like the pitched roof. I like the hard materials. I didn't mind the color scheme. But again, it's all very subjective. It depends on the buyer.

But there is a bit of fashion involved, isn't there? So I guess there'd be ones that you'd lean towards thinking, well, that's going to be more competitive. And so if that's too early, then get that out of the way. And then the buyers can't wait for that one.

I mean, there's so many different ways. And I guess I know owners, back when I was a sales agent, you would have had the same thing. An owner will be sitting there in the living room with the agent trying to work out, well, should I have a morning auction or an afternoon auction?

You know, like a... Are there any buyers left in the afternoon? Or do we have all the buyers hold off on the morning auction because my property is better? There's all this sort of trying to game the system, but I'm not sure there's a rule set, a proven strategy to this.

Yeah, and in the regular market, if you're going later in the day and the similar property is going to auction on the same day, that buyers are splitting between. And then on the earlier, you do get stressed. Vendors do get very stressed, right? In this scenario...

For example, the property that got the highest price was in the center of all five, and it was a nice home and nice little landscape. But personally, I'd usually go for the bookends, something with a little bit more space, a little bit more air and light on the ends.

And one of those passed in.

What do you think it was about the middle house, though, that made it so popular? Because only the outside was different, really, wasn't it?

Yeah, the exterior was different. The interior floor plan was the same, but the cosmetic fit out was what the contestants select.

The wellness, the wellness thing.

Yeah, landscaping was different. So that was all designed differently, but that can be changed with money. That can all be changed. Could it have been, and this is in hindsight, that the buyers went well over budget expecting that it was the first one. They weren't sure.

It didn't seem like it was too high over the quote range. And that's dangerous thinking that agents are quoting fairly or under quoting and not doing your homework. And they had a little bit of competition. It was the first cab off the rank. There was a big buzz.

If they're not worried about money and they've got big wallets going an extra 200K over what they should or 400K over, sometimes they look at in hindsight as an education cost.

How do you reckon those buyers would think? Given the two that passed in, I wonder how the other three maybe felt that they had got a bit exuberant.

Yeah. I'm sure on the day they were crapping themselves thinking maybe we did go a little bit hot and heavy, but I don't know what their purpose was for the property. I don't know who the particular buyers are.

They didn't chat to anybody. You didn't talk to them and ask them?

We chat, but on the day, I don't think anyone's got any definite answers as far as what they can share. So if it's going to be occupied as a getaway or Airbnb, that's possible. But again, I think the ones that were competing in that moment went a bit hard.

I've got to ask you, Mark. I wasn't going to go, but I'm just interested on your take on the Melbourne market. I mean, that obviously has just happened to blockers, but I'm just out of my curiosity. How are you seeing things? I mean, it's been tough down there the last few years.

I mean, it's obviously underperformed other parts of the country, but the fundamentals, it's still a great city. But it's interesting to see where you feel it is in the cycle right now and what you're seeing on the ground.

Yeah, definitely a little bit more positive as far as sentiment goes in certain price ranges in certain pockets. So I deal personally around the Northwest quite a bit and Northern and Western suburbs and had a big exodus of people leaving owner occupiers, leaving the state post COVID.

Then we got hit with all the interest rate. rises and regulations, heavy regulations on rental, big exodus of investors. So close to 30% gone.

Now I talk to agents, first home buyers and investors flying in, buying up property under 1.5 mainly, almost every two out of three properties, there's some competition from interstate investors, say Sydney, Queensland, WA, that are looking at growth opportunity and seeing the

regulation and land tax and other costs as a cost of doing business. But it's a supply issue. We've got low supply. There's the brink of some fair capital growth ahead in Melbourne. It's looking a little bit more positive.

And first home buyers are getting these untapped sort of access to incentives, not driven by their means testing with income and household income. So they're fighting pretty hard in that budget that I mentioned.

And without extra supply, I think it's a small wave of buyers that are going to benefit and the rest are going to have a higher market to compete with. And there won't be much affordable under a million dollars anymore.

Speaking to colleagues around the state that deal in the higher value areas like Southeast and Bayside, that $3, $4 million price range and above, some are going fairly quickly, quickly before they're listed and some still selling above budget expectations. But again, there's

then some that are patchy and still pass in. So one saying that someone said to me once, it's harder to pick than a broken nose. But I think the next six months will be telling into the February market as well.

So let me just take the read on that. So the sub 1 million market, super competitive, right?

Even 1.5.

First home buyers and investors all trying to ride the wave of increasing demand. And whether the first home buyer is doing it or whether the investor is playing the first home buyer and just playing the 800, the 700s, I mean. Yes.

But are you seeing in that 1 to 1.5 range as well, a bit of investors? Because that's interesting because that is a different part of the market. Yeah. You're not so much playing the 5% deposit scheme because it caps out about a mil, right?

So you're playing more the upgrader market and the holding costs are much bigger, right? Because Melbourne yields are a little bit lower. So you're still seeing a bit of interstate, which hasn't probably happened for a good five plus years down the line. Exactly.

It's a welcome, fresh introduction. In the last three months, mainly, it was a pretty strong September quarter, but it's now just catching up on the loss of investment properties to bring that supply back because you've got the housing crisis and rental crisis driving pressure in the rental market and yields rising.

They'll start to balance out in the next 12 months because I see what I could buy for 850 to a million now, it's already 950 to a million and 50 in the last six months. And so that crushes your yields a little bit in the short term, but everything will still get growth.

The ones that I mentioned going in that 1.5 million, some of them are even second-time investors looking to take advantage of the land and town planning incentives, even to see where they get opportunity to put a second dwelling on or a granny flat, the opportunity to boost the income.

knowing that they've got a fair bit on the one title, but get two dwellings as a long-term agenda so that they're a little bit more well-heeled and they're benefited in the last decade from investing well. Mark, can you finish this off with a property dumbo here?

Oh, look, I've made plenty of mistakes over the years and then also interesting clients. If I'm going back even interesting client I had actually. One of my first clients, it was a sales agent and I was a sales agent at the time.

And it was one of the clients that triggered me to be a buyer's agent by representing him. He'd be past, well past now, but he was already 95 years of age back around early 2000 period. Ex-horse trainer, lost his leg in a traumatic accident at a young age.

I had been a criminal at some parts of his life as well. Just an interesting story. But Every time I came to visit him, he'd always make sure that I bought him a cask wine and sit down with him and talk.

But one day I forgot to say my name when I knocked on the door to visit him and have a chat and he pulled the shotgun out the window. I had to die behind his car.

So I was in my 20s, but it was always a good idea to ring a head, especially when we deal with people of all walks of life and different mental states. So yeah, that was...

This is the guy that convinced you to become a buyer's agent.

That's hilarious. After that, we formed quite a strong bond and my wife, Michelle, had a traumatic accident. So we related there, but that was actually just months before Michelle had a workplace accident.

So we reached out after that and we became quite close to the point where he dropped some of the people that were acting as his power of attorney and asked me to step in and help him buy a home to downsize into.

So he became my full public policy client and I liaise with his powers of attorney, but we became good mates. So yeah, his name was Bill McMullen. Strong character, strong character.

Well, I can honestly say I've never had a gun pulled on me in my line of work and I hope that I can go to my dying days where I'll ever be able to say I'd had a gun pulled on me. So thanks for that story.

It's near Flemington Racecourse. It's got a strong underworld history. So yeah.

Some characters. Mark, thanks for coming along. It was good to get a little bit of insight, the background of the block, a little bit more of a lighthearted episode for us.

But there's some really good strategic gems in there, really, about how we should be looking at auction and assessing properties before we go to auctions as well. So it's been great chatting with you. Thank you.

Lovely. It's been great chatting. Thanks, Veronica and Chris. Yeah, a lot being here. Enjoy the chat, Mark. Yeah, definitely. It's great.

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