Why buyers are paying top dollar to live in the Mornington Peninsula
There’s been an out-of-control freight train thundering through Victoria’s Mornington Peninsula and it’s taking a while to slow down.
That’s how agents describe the phenomenal price growth that’s hit the region, propelling house price growth in one suburb to a rip-roaring 39.7 per cent over the past year alone.
“We’re now getting used to seeing records being broken on a regular basis as we’ve had some tremendous sales,” says Rob Curtain, managing director of Peninsula Sotheby’s International Realty.
“And, like a freight train, it’ll take a while for that momentum to stop.
“We’ve had so many people wanting to move down here and a shortage of stock as the ones already here didn’t want to leave, so we’ve seen some tremendous price increases. With that lifestyle change too, I think many people want to stay on and either work remotely or commute a few days a week into the city.”
Holidaymakers have long loved the Mornington Peninsula, around 90 kilometres south of Melbourne, for its glorious beaches, bushwalks, wineries, cafes, restaurants, gourmet stores, antique shops and galleries.
But that all changed with the pandemic, says Domain chief of research and economics Dr Nicola Powell.
Suddenly, Melburnians started seeing it as a welcome escape from lockdowns, while Sydneysiders and expats viewed it as a comparatively affordable buying option.
“During COVID we saw some eye-watering levels of price growth,” Powell says.
“That’s been spurred on by people buying holiday homes as their principal family homes, to upgrade their lifestyle and have a smaller base in the city. That really accelerated the price growth to some extreme rates, with locals often being priced out. But now we’re seeing it calm down [with] lower price growth.”
The area as a whole had pretty respectable price growth, on Domain figures, over the past year, growing 14.7 per cent for houses to a new median price of $975,000, and 15.5 per cent for units to $635,000.
At the suburb level, however, some of the growth has been monumental. Modest Rosebud, for instance, has the highest growth of 39.7 per cent to a median of $880,000, while Rye rose 37.9 per cent to $1.2 million, Mount Martha and Safety Beach rose 31.4 per cent to $1.62 million and $1.14 million respectively, and Tootgarook and Cowes were up by 30.1 per cent to $941,500 and $793,503.
Portsea is still the most expensive suburb with a median of $3.78 million after a rise of 29.2 per cent over the year to March 2022, followed by Sorrento at $2.3 million, up 23 per cent, and Mount Eliza at $1,752,500, up 25.2 per cent. Somers is up 12.4 per cent to $1.7 million and Blairgowrie up 23.7 per cent to $1.67 million.
“It’s been absolutely phenomenal,” says Dean Phillips, director of McEwing & Partners.
“A lot of that reported growth was driven by the sale of some very expensive houses, where people didn’t have anywhere else to spend their money, but over the past year, we saw prices that were usually around $1.1 million go to $1.8 million.
“We’ve had lots of interstate buyers who see that you can buy something here for about 50 per cent of its equivalent price in Sydney.
“We’ve had international buyers too, and have seen sales at $10 million, $20 million and $30 million.”
Phillips recently sold a farm at 110 Cobb Road, Mount Eliza, for circa $8 million, a mansion on Canadian Bay Road in Mount Eliza to pop star Tones and I for $7.08 million and 1 Trig Point in Mount Martha for $6.8 million.
Curtain sold 261 Muscreek Road, Flinders, for just under $24 million, 4 Callanans Road, Red Hill South, for $20 million and 3507-3513 Point Nepean Road, Sorrento, for $12.2 million.
“There’s a steady number of buyers around at the moment,” says Sam Danckert of Danckert Real Estate.
“We don’t have the kind of abnormal market and hysteria-driven buying now that saw people offering 15-20 per cent over the asking price of a property.”
Most in demand at the moment are premium established houses, new builds or older homes that have recently been renovated, Curtain says.
“Building costs are now much more than they were, and there’s disruption to the supply chains and builders won’t offer fixed contracts, so buyers don’t want homes so much that need a lot done to them. We’ve found that the demand for land to build on has also softened dramatically.”
Yet prices are still growing, although not by as much as in the past two years, Phillips says.
“I think by next summer it’ll return to a normal market. But in the meantime, prices are still going well and will continue to go well.”
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