With a $10m splash, will The Block make its money back?

Channel 9 launch their Upfront and Personal content for 2017 at the Star Casino Sydney.Pictured are the Block presenter Shelley Craft and Scott Cam8th November 2016.Photo: Steven Siewert

The Block: Will and Karlie win and take home $815,000Why relocating a house can be a cheaper optionThe rejuvenation of Port Melbourne starts on The Block

Work has already started on the Elsternwick site chosen for the coming season of The Block, with the project expected to yield the most expensive homes on the reno series yet.

Five period houses are likely earmarked for the 2989-square-metre vacant block at 46 Regent Street, and each could fetch about $3.5 million.

The producers are also taking it up a notch by paying about $4 million more than the previous highest-priced Block site ??? $6.25 million to secure the former Hotel Saville in South Yarra.

Land title documents show a company linked to Channel Nine, with Nine chief executive Hugh Marks listed as one of the directors, forked out $10.34 million for the vacant Elsternwick site, which settled in January. Filming is reportedly due to start in late April.

Julian Cress, co-creator and executive producer of The Block, declined to comment.

A price at auction in the vicinity of $3.5 million would easily leapfrog the highest price paid on the 2016 season finale in Port Melbourne, when the apartment renovated by winners Will Bethune and Karlie Cicero sold for $2.6 million at auction.

Rather than rejuvenating an old building like previous years, contestants this season are likely to renovate a relocated weatherboard home.

Tradesmen have been spotted digging holes and measuring parts of the site.

Setting aside renovation and other costs, the producers are looking to make about $7.16 million from the project this season.

It would match the profit made in Port Melbourne, when five luxury apartments in a former rundown soap factory ??? which cost producers about $5 million ??? netted a total of about $12.05 million at auction.

And the margin would double the $3.6 million made by the Blocktagon apartments.

This year the show will also come with a new set of challenges.

Regent Street was located in the Elsternwick Heritage overlay area, Glen Eira council director of planning and place Ron Torres said, so a planning permit was required to demolish or construct a building.

A plan to open a private boys’ school campus on the vacant site, formerly a low-rise nursing home, was abandoned by the vendor, Yesodei HaTorah College, after community outrage. At a council meeting in 2010, singer and local resident Kate Ceberano argued the proposed school would ruin the neighbourly atmosphere of Elsternwick.

The previous owner, a developer, bought the site with intention to build townhouses, but that plan, too, faced backlash from residents, Biggin and Scottdirector Bill Stavrakis said.

Domain Group data shows the land, which sold for $3 million in 2006 before selling again for $4,785,000 in 2010, tripled in value over the past decade. Nine is likely to have a premium to secure the site. It marks a return to the show’s original premise of home renovation – the last season to feature homes, as opposed to apartments, was in 2013 in Bondi.

Mr Stavrakis said the vacant block would be most suited for period homes, which would involve relocating a property from elsewhere in the state.

Though it was difficult to pinpoint a price range without a plan, he said the renovated houses would be worth about $3.5 million.

“Period homes in Elsternwick are selling for anywhere between $2.5 million and $5 million in the last 12 months,” Mr Stavrakis said, adding that $3.5 million could buy a four to five-bedroom home on about 500 to 650 square metres.

Hodges Caulfieldauctioneer Oren Flamm expects the Elsternwick houses to attract more prospective buyers than the apartments in previous seasons.

Compared with the limited stock of period homes in Elsternwick, he said Port Melbourne and Prahran had a large supply of apartments.

“Elsternwick is a highly sought-after area, it’s very trendy, and the homes that usually yield the best prices are the Victorian period-style homes, renovated to the highest standards,” Mr Flamm added.

In the past, The Block apartments in South Yarra and Port Melbourne have been targeted by owner-occupiers and investors.

Bethune and Cicero’s apartment at 1/164 Ingles Street, Port Melbourne, has recently been leased for $850 a week.