Mornington Peninsula Market Updates

Mornington Peninsula – Spring 2023 Property Update

Home Mornington Peninsula – Spring 2023 Property Update

Nov 15, 2023

Traditionally, spring marks the commencement of a vibrant 5-month selling season on the Mornington Peninsula, culminating in a super-weekend of auctions on the Australia Day long weekend. However, this year deviated from the norm as we experienced a sluggish start to the increase in stock levels during the early spring months. This unexpected delay in stock rise played a role in maintaining stable property prices across the Peninsula. Variances in performance among suburbs were influenced by external factors, including interest rate hikes and additional disincentives for investors imposed by the State Government, such as a 7% short-stay tax.

The Andrews Government’s introduction of the short-stay tax raised concerns among locals, particularly since the Peninsula heavily relies on tourism, especially during the summer months. With limited hotel and resort accommodations, businesses fear that the new tax might divert investors to states offering better returns, potentially deterring tourists who seek more cost-effective destinations or opt to stay home. Fortunately, the Peninsula escaped an additional vacancy tax targeting land banking. I completely understand and support measures to improve housing affordability and supply of rental properties, but I disagree with short sighted reactive measures that do more vote grabbing rather than planning long-term solutions.

Sally Jones, Rental Department Manager at Warlimont & Nutt, provided an insight into the local rental market. “As we head into our busy Summer leasing period, I wanted to share with you that the rental market here on the Peninsula is still going strong with a high demand in all suburbs. The rental crisis in some suburbs of Melbourne is a concern with more demand than supply pushing rents higher- offering more affordable housing or fair market rent is what is required. Overall, 2023 in Mt Martha and Mornington it has been a steadier leasing year but our average days on market has only slightly increased as our vacant rates are 1%. We are still seeing a high volume of new leases signed and leases renewed with rents increases. Yes we have a few less homes to offer for lease with more investments sold these past 2 years but this means that the rents are still holding strong and we hope to see more investors into our Market for 2024 as rentals will always been in high demand across the state.”

And while there seemed to be a consistent period of rate pauses and a return to economic stability, inflationary pressures from employment figures and international migration, coupled with a Melbourne Cup day rate rise, felt like the final nail in the coffin. There is now more uncertainty for mortgage payers and the market has reacted in the expected fashion, largely taking out any real urgency from buyers to transact. Some nervous vendors needing to sell have enticed buyers with price reductions and some suburbs have had an uplift in sales volumes due to this. Those vendors who are prepared to wait it out are standing firm on price and weathering the storm, adding to the increase in days on market we are seeing across the board. It isn’t unusual for winter to have a slower market in this respect, but the market remains in the favour of buyers due to the lack of urgency and willingness of vendors to get a deal done below initial expectation.

Of course, we do see results that buck the trend, and these tend to be happening on homes that are move-in ready, close to the beach or shops, and have an element of scarcity. It’s no surprise that these factors are part of what we look for always for our clients, as markets cyclicly rise and fall and you don’t always get to choose when you need to sell, therefore having a property that can appeal to buyers in any market is key for mitigating liquidity risks.

Now, let’s delve into a roundup of major markets along the Mornington Peninsula.

Northern Tip Mount Eliza, Mount Martha & Mornington
Around the Hill Red Hill, Shoreham, Main Ridge, Flinders
Southern End Portsea, Sorrento & Blairgowrie

Mount Eliza

Buyers’ market

JULY – SEPT
# of Transactions: 73
Total: $130,302,950
Median: $1,650,000
Max: $3,465,000
12 Month rolling median house: $1,650,000
Days on Market: 74

Compared with the same period last year, we only saw a 10% increase in stock levels, which also remained fairly consistent throughout 2023. The median price has hardly shifted at all in the past 12 months, and the number of sales has also remained very consistent. There was a slight increase in the number of sales this winter but conversely the days on market figure crept out to 74 days for the average home to sell. This does not include units, apartments, or vacant land. What the stats indicate in Mt Eliza is a bit of a stalemate, if something scarce or well priced comes on the market it will sell quickly, otherwise it is going to sit there for 2-3 months. Interestingly, there were 4 properties that sold in this period that had been on the market for a year or more. These were 1364 Nepean Hwy, 23 Glen Shian Cr, 33 Winona Rd and 6 Rylston Ct – some very patient vendors!

Mornington

Balanced market

JULY – SEPT
# of Transactions: 100
Total: $137,647,511
Median: $1,085,000
Max: $7,250,000
12 Month rolling median house: $1,142,500
Days on Market: 37

A similar story can be told in Mornington where the market has remained very consistent so far in 2023, and when comparing winter last year to this year, almost identical number of listings. The surprising indicator though, is the volume of sales has increased from 71 last winter to 100 this winter. It is the busiest quarter that Mornington has had since 2021. Co-incidentally, the median price has dipped 8% in the past quarter to the lowest level since 2020. This could be due to a larger volume of sales of lower quality homes in gentrifying areas of Mornington rather than the real blue chip locations. I say this, as the days on market has been decreasing all year and is now mid 30s and borderline a balanced market. We did see a few higher end homes sell, such as 29-31 Morell St, Mornington for $7.25M by Chelsey Gibson of Marshall White, 6 John Rowell La for $4.8M by Alex Corradi of Danckert Real Estate, 21 Caraar Creek Ln for $4.51M by Dean Phillips of McEwing & Partners.

Mount Martha

Buyers’ market

JULY – SEPT
# of Transactions: 58
Total: $101,649,000
Median: $1,487,500
Max: $6,200,000
12 Month rolling median house: $1,575,000
Days on Market: 57

Mount Martha had 58 home sales in the previous quarter which was nearly identical to winter the year prior. The days on market was also nearly identical to the same period last year at 57 days. The indicators that have changed though are the average number of listings which grew to 139, up from 120 same period last year however still the same level as the previous quarter, and finally the median price which pulled back around 8% like what we saw in Mornington. For the calendar year it is tracking just under $1.6M which is around $200k or roughly 12% lower than 2022. Standout sales for the period were 27 Bay Rd, by Amber Sealey of Danckert Real Estate for $6.2M, 24 Glenisla Drive, by Fergus Nutt of Warlimont & Nutt for $5M, and 6 Alice St by Trent Cameron of Warlimont & Nutt for $3.6M.

Shedding light on the current dynamics in Mt Martha, Amber Sealey of Danckert Real Estate mentioned, “The Mornington/Mount Martha property market is beginning to show promising signs of stability after a notable decline in property prices since its peak in March 2022. As the spring season unfolds, the area is witnessing an increase in listing volumes, but the days on market continue to stretch, reflecting cautious buyer sentiment. One notable aspect that continues to influence the local market is the strength of fully renovated A-grade homes. This demand is driven by the soaring construction costs, which make these meticulously upgraded properties all the more appealing to prospective buyers. Recent transactions sold by Danckert Real Estate in this category have yielded strong results, notably at 27 Bay Rd, Mount Martha, and 6 John Rowell Lane, Mornington.”

Around the Hill

Red Hill, Shoreham, Main Ridge & Flinders

JULY – SEPT
# of Transactions: 18
Total: $36,941,000
Median: $2,295,000
Max: $4,100,000
12 Month rolling median house: $2,160,000
Days on Market: 78

It continued to remain sleepy around the hill, with a mere 18 reported sales in the past quarter across the 5 suburbs I monitor. The largest at only $4.1M being the 2 acre country coastal beach house with views over Westernport Bay at 50 Seychelles Rd, Shoreham by Blaine Patton of Patton Estate Agents. 6 Bluff Ave, Flinders close to the beach and on half an acre was the next best result at $3.225M by Ruth Williams & Tom Barr Smith of Kay & Burton. Consequently, we saw a drop in the median price for the quarter which simply reflected the offerings at the time on low stock volumes, and the days on market figure also crept up to the high 70s which indicated a lack of urgency and a lack of quality homes on offer. The other thing affecting the hill market is increases to land tax, scaring off first-time would-be hobby farmers, which we saw an increase of during 2020 and 2021.

Portsea

Balanced market

JULY – SEPT
# of Transactions: 1
Total: $4,500,000
Median: $4,500,000
Max: $4,500,000
12 Month rolling median house: $3,450,000
Days on Market:

The single reported sale in Portsea over the winter period was an off-market sale at 35 Bass Rd for $4.5M. This is not overly uncharacteristic of Portsea to “shut up shop” this time of year, as we also only saw the single reported sale of 26 Wanda Cl in winter 2022. Without any meaningful numbers in listings and sales to analyse, I won’t claim to have any particular forecast for Portsea other than noting that we have started to see a few middle-market listings hit the net in the last couple of weeks, but nothing at the top end on market. Quietly, there are some clifftop homes available.

Sorrento

Buyers’ market

JULY – SEPT
# of Transactions: 14
Total: $41,995,000
Median: $2,062,500
Max: $13,000,000
12 Month rolling median house: $2,120,000
Days on Market: 86

Just 14 sales were reported during winter in Sorrento; however, some impressive results still stand out, such as the sale of 8 Leggett Way, the beautiful clifftop home overlooking Cameron’s Bight, sold by Liz Jensen of Kay & Burton for $13M, and 15a Parkside St, the French-enthused luxury home by Michelle Skoglund of Aqua Real Estate, fetching $4.5M. Notably, 25 Collins Pde by Liza Milchman sold for $3.55M. While 6 of the 14 sales took more than 90 days, one exceeding 200 days on the market, the market seems to be stirring from its winter slumber, akin to Blairgowrie. As we approach summer, traditionally the best season for selling in Sorrento, we closely monitor to see if this trend continues into 2024.

Adding a local perspective, Geoff Hall of Marshall White Sorrento provided some insight, “We are seeing a rise in listings for Portsea, Sorrento, and Blairgowrie although stock levels remain tight. At the top end, there have been two trophy Cliff-Top homes listed, and I’m aware of another two off-market. Buyers are experiencing more choice, and interestingly these listings are being sold without the need for price adjustments or discounting. Buyer activity increased in September with numbers at opens noticeably higher. My office sold two properties in Sorrento in the last week with both attracting multiple offers. If properties are presented well, marketed well, and priced correctly, they are selling in a timely fashion. We expect to be busy right through the Summer season.”

Blairgowrie

Buyers’ market

JULY – SEPT
# of Transactions: 17
Total: $32,577,500
Median: $1,775,000
Max: $3,250,000
12 Month rolling median house: $1,672,500
Days on Market: 66

The volume of sales across the winter period in Blairgowrie was slightly up on the year prior, but noticeably the quarterly median price did improve to $1.775M largely thanks to 3 quality sales at or above $3M, and 2 more just below the $3M mark as well. 2973 Point Nepean Rd for $3.25M sold by Tim Bradler of Belle Property, 30 Stringer Rd for $3M sold by Emil Foller of Jellis Craig, and 2 Prince St which also sold for $3M by Jeannie Anderson of Jellis Craig. The days on market figure has decreased since the autumn period, showing early signs of a recovering or at worse a stabilising market. As we head into spring and summer, the market in Blairgowrie is poised to return to a balanced affair depending on stock levels. We currently have twice the volume of stock on the market compared to the same period last year, however compared with long term averages the levels are still quite healthy and if anything, points to how low the stock has actually been in the past year to 18-months. Sales above $3M don’t happen in Blairgowrie unless there is still some level of confidence, and to have 5 above $2.75M for the winter period is a positive sign going forward.

Looking ahead on the Peninsula in 2023

Despite the prevailing negative sentiments surrounding interest rates and taxes, the short-term outlook for price growth remains bleak. The impact on buyer confidence has significantly influenced market dynamics. However, specific markets, notably Blairgowrie and Sorrento, have demonstrated resilience and weathered recent challenges reasonably well. In contrast, other markets like Mornington, Mt Eliza, and Mt Martha which have fared slightly worse are now showing signs of improvement, albeit at a gradual pace. The measured recovery in these areas suggests a slow but steady adjustment to the economic conditions.

While not everyone is primarily motivated by capital growth or holding costs in their decision-making process, a significant segment of potential buyers remains noticeably absent from the market—specifically, holiday home buyers and investors. The absence of a robust balance among various buyer types contributes to a hiatus in stock turnover. This imbalance has repercussions for those aiming to upgrade, as the limited options available hinder their ability to sell existing homes and progress to new ones.

Indicators have suggested a potential resurgence in market activity. However, external factors such as global events, disincentives implemented by the government, and conservative monetary policies from the Reserve Bank of Australia have thwarted any immediate hopes of a rapid recovery. What we have right now, and have had for a while, is optimal buying conditions for those who are active and are ready to purchase, and for those buyers who want to buy land or a renovation project, the prospects are even greater.

Sellers feeling uneasy about the market are holding back from listing their homes online, concerned about incurring unnecessary marketing expenses and the potential for their properties to linger without attracting attention. Consequently, my off-market database is currently at its peak in terms of the volume of homes available across the Peninsula.

If you’re in search of something particular that may not be readily found online, I encourage you to reach out. There’s a good chance that within my off-market database, I might have something that aligns with your specific criteria. Your ideal property could be just a conversation away.

Mornington Peninsula Area Specialist

Michael Sier

Get in touch with Michael to find out more about the Mornington Peninsula property market, or make an appointment to discuss your requirements and see how we can help you get into your ideal home sooner.