The Property Cycle Meets ‘The Block NZ’

In the world of property renovation, timing isn’t just important, it’s everything.  

For New Zealand homeowners and property investors, this lesson has played out dramatically on the reality TV show ‘The Block NZ’. That turns run-down houses into multi-million-dollar homes, often with wildly different results depending on market timing. 

The successes and struggles of Block NZ contestants offer a clear roadmap for renovators, flippers, and long-term real estate investors aiming to maximise returns.

Riding the Boom: Big Profits, High Risks 

During boom phases, the property market can be a renovator’s dream. Buyer demand surges, competition is fierce, and well-presented homes can fetch eye-watering prices. For example, the 2016 season of The Block NZ, which coincided with a roaring Auckland property market, saw homes selling for an average of $1.445 million, netting average profits of $245,250 per property. 

The winning team, Sam and Emmett, walked away with a record $380,000 profit, a stunning outcome that highlighted the upside of renovating in a hot market. 

However, housing booms also breed risk. 

In 2021, as the post-COVID housing boom reached fever pitch, another pair of Block contestants, Tim and Arthur, saw their house sell for a staggering $660,000 above reserve, the largest single-night profit in the show’s history. But for every blockbuster win, there’s a cautionary tale. 

The key risk is timing your exit perfectly. Just one year later, as the market cooled sharply, the profits of similarly renovated homes plummeted. Renovators who missed the peak found themselves struggling to break even. 

The Pain of the Downturn 

As the property cycle turns, those same high-flying profits can quickly evaporate. This was painfully clear during The Block NZ’s 2017 and 2022 seasons, when the Auckland housing market entered a downturn. 

In 2017, average profits per property dropped to just $16,250, a fraction of the previous year’s highs. One team even had to hold a second auction to get a bid above reserve. In 2022, things were even bleaker: the winning team made just $4,000 in profit, while another pair saw their house sell at a $39,000 loss.  

These outcomes underscore a brutal truth: even beautifully renovated properties can underperform in a stagnant or declining real estate market, especially when buyers are cautious, credit is restricted, and demand for flipped homes is low.

Catching the Recovery: Your Strategic Advantage 

Between the extremes of boom and bust lies the recovery phase, a quieter but often highly profitable part of the property investment cycle. For renovators with patience, this can be the perfect time to sell.

The Block NZ’s 2020 season, delayed by COVID-19, offers a powerful example. Homes that might have struggled to sell in 2020 instead went under the hammer in 2021, when a post-lockdown housing boom pushed average profits over $500,000 per property – more than double the usual average for the show. 

The lesson here is simple: if you can afford to wait, selling into a rising market often yields far better results than trying to push a sale during a slump. Timing isn’t just about picking the right month, it’s about understanding where the market is in its broader cycle. 

Timing Takeaways for Kiwi Renovators 

• Boom: Go big, but don’t get greedy. Booms offer huge potential for profit, but they also turn quickly. Selling before the market cools is critical. 

• Downturn: Be cautious. Consider holding off on major renovation projects if a market correction is underway, as even well-executed projects may struggle to find buyers. 

• Recovery: Be patient. Renovators who time their sales for the market recovery can capture significant gains as prices rebound. 

Summary 

Nobody likes to see someone working extremely hard, give up 4 months of their lives, their jobs, time with their family, and sanity, only to see them net $4,000 income from the sacrifice or worse still make a loss. 

We know the reason the show was cancelled is because the producers unfortunately learned a ‘home truth’: the profits previous contestants had attributed to hard work were, in fact, driven by the property cycle, not renovation alone.

At Staircase, we’ve always known this truth. Property is a great passive earner, and your property will increase in value, over time, if you take the step and buy a rental. Our philosophy is that the effort and risk of renovating and flipping a property is too high… the juice just isn’t worth the squeeze when it comes to renovations. You are far better to win by adopting a plan of investing longer term using time in the market, not just timing the market. 

Ultimately, the most successful renovators – like the standout winners on The Block NZ – are those who understand that property investment is a game of cycles. Knowing where you stand in that cycle can transform your property investment results. 

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