Mornington Peninsula Updates

It has been an incredible rollercoaster of a year so far, with twist and turns that nobody saw coming. Despite the sad reality that there have been COVID-19 fatalities, business closures, job losses and stay-at-home orders, there has also been a strong and renewed sense of community spirit and care for each other that possibly was lacking in the past.

As predicted, the Stage 4 restrictions paused market activity just as Victorians had learned to buy and sell real estate safely and effectively in the new COVID-19 environment. As we came out of the first round of tightened restrictions, what we saw on the ground across the Mornington Peninsula was a pent-up demand for property and a shortage of quality listings. This was felt equally across metropolitan Melbourne and depicted in the REA Insights Weekly Demand Index – Buyers’ report below.

The threat of further restrictions and fear of price falls, coupled with some anxious vendors not wanting to commit to marketing campaigns, drove a large proportion of stock underground into what we call an off-market scenario. Strong agent relationships ensured that our clients were able to transact and take advantage of having representation when other buyers were left in the dark, a result of our experienced advocates understanding how to navigate difficult market conditions.

The large spike in demand from pent-up buyers in Melbourne looking to upgrade, relocate, or buy a holiday home on the Peninsula was the strongest I’ve ever experienced over a winter period. However, we still didn’t get the volume of new listings to meet the increased buyer demand, which put upwards pressure on prices and kept many buyers waiting on the side-lines.

The advice we are giving clients today is to plan for another – and possibly even faster – bounce back to the market. Be ready to take advantage of opportunities as they arise, which may occur at the tail end of this Stage 4 period.

If you’ve got finances in order and are ready to act quickly, you’ll be ahead of the curve when restrictions are eased, and the masses of buyers return to the market. Now is the perfect time to engage with BuyerX and plan a strategy for your next move, to avoid rushing into a decision under pressure when opportunities next arise.

Below is an overview of the major million-plus markets on the Peninsula, with apologies to Mornington, McCrae, St Andrews and Blairgowrie which are not featured below (please get in touch for my assessment of these markets if you are interested). I’ve also omitted August sales from these stats, as transaction activity has not been under normal conditions.

I’ve separated Mount Eliza and Mount Martha, as they tell two different stories despite being quite similar in lifestyle and demography. Buyer demand doesn’t seem to have waned in Mount Martha throughout 2020, despite the interruptions with Stage 3 restrictions.

In the last half of 2019, the market was starved of listings right up until year-end, when vendors all started to list their properties to cash in on any post-election price growth. It was as if they were waiting for a confirmation that the market had started moving upwards again.

This led to a slight over-supply in early 2020, presenting buyers with more choice. I would argue it briefly entered a buyers’ market before COVID-19 took hold and listing numbers tapered off. Still though, the number of sales hardly changed from either side of Summer and the median price has continued to rise by 8-10%.

Sam Danckert from Danckert Real Estate tells me that “the market from January-August 2020 has lacked consistency due to the interruptions of COVID-19 activity restrictions, however it is showing an intermittent positive price trend. The nexus between limited supply of quality properties (attributed to vendors lacking confidence in the market) and increased buyer demand (due to the lifestyle appeal of Mt Martha) has resulted in some positive sales occurring.

In the case of 75 Glenisla Drive, the property was purchased in 2016 for $2.85m and was listed for sale for 59 days by our agency in March 2020 at $3.5m-$3.75m. The property attracted significant interest from Melbourne based buyers looking for a luxury residence or a holiday home, and was purchased by a family from Kew as a weekender within the quoted range.”

There have been a number of other $3M+ sales in 2020 mid-pandemic, including a $5M sale of a property that had been on the market for the previous 6 months. This suggests to me that there is growing confidence from buyers and sellers alike, and the demand appears balanced as we head into a spring market.

Mount Eliza tells a slightly different story, with the market now seemingly easing somewhat off a stellar run between 2015 right up to the end of 2018, only tapering off with the fear of policy change brought by a new Federal government, which never transpired. The volume of listings in 2020 has slightly increased from the previous 6 months, but is still lower than the same time last year by around 20%. Conversely, the number of sales in 2020 has declined by 30%, which tells me that the market is currently showing better signs for buyers than sellers. A greater number of listings, and fewer number of sales.

It isn’t by any means a concern for the market as the median price has still improved, but it gives buyers more choice and is still in my opinion a balanced market, just slightly tipping toward the buyer’s favour. If listing numbers continue to grow out of line with buyer demand this spring, we will see Mount Eliza enter a buyers’ market.

The story “around the hill” is one of a lack of supply of good quality and top end properties in 2020. Typically, the season comes to life in spring and early summer for 6 months of the year along the Westernport side of the “hill” from Merricks to Flinders, remaining sleepy in the months either side.

Therefore, what we’re comparing in sales volumes and medians could be skewed with seasonality, but I’ve gone back through the data and looked at year to year comparisons to confirm my opinion on the current anecdotal feeling in the market. The big properties aren’t coming onto the market in the same volume as 2019, yet the buyers in 2020 are there in force, pouncing on anything with a decent position.

The A grade properties (with views) are being run to auction, selling above the range as we saw with 179 Point Leo Rd and recently 31 Oceanview Ave, both just shy of $4M. Other homes with small compromises are still being bought in a matter of weeks or days, as was the case with 339 Tucks Rd which sold in 2 days for the full asking price of $2.2M.

Even though the median price looks to have come off in the stats, I am not seeing this at all on the ground. In fact, I would go the other way and say prices have firmed again this year. According to Meg Pell from Kay & Burton, “in the 6 months prior to January the market in this area was healthy, and for the right property, it was and has always been strong. Stock is usually fairly tight. This year winter seemed irrelevant and we have seen huge growth in Melbourne buyers keen to make the move from the city right now, rather than in the future, for both permanent and part time living. As a result, stock has been even tighter, and prices achieved have been high. Even in Stage 4, enquiry on properties for sale remains strong.”.

Despite the stats showing that sales volumes have hardly changed, you can see that the total value of properties sold is 50% lower, not because of price falls, but because the price-point of properties on offer are not the same this year as they were last year. If you own an acreage in these areas and are thinking of selling, you’ve probably never had such a strong demand for your product than right now. This is truly a sellers’ market.

Looking back, in 2013, ‘14, & ‘15 Sorrento and Portsea saw an enormous surge in listings, with peak periods having around 75 properties in Portsea and 130 in Sorrento on the market. The average days on market per listing was also quite high, with nearly 50% of the homes on the market for over 180 days. That volume declined by 50% in 2016 and again in 2017, when the market returned to normal with listing volumes remaining steady.

Since January 2020, particularly during Stage 3 and Stage 4 COVID-19 restrictions, and taking into account the area’s seasonality, listing volumes have declined again by about 20% in Portsea, but interestingly, have remained more stable in Sorrento.

When I spoke with Samatha Moffatt of RT Edgar, she told me “after the market decline that effectively commenced around May 2018, the spring of 2019 started to look promising. We had some good results and found that the market was bouncing back. However, as spring turned to summer, there was an apparent breach in the supply and demand ratio, so the market slowed again for a short period. Then the pandemic hit and sent buyers and vendors packing, which was interestingly, only short-lived. 

After a few weeks of silence during the first lockdown, buyers began to re-emerge. These buyers were cashed up, perhaps having removed their investment in shares at the earliest hints of the virus and were keen to look at property in regional and coastal areas such as the Mornington Peninsula. Vendors are slightly more inclined to offer their properties off-market in the short term because of the uncertainty of the virus, but the fact that there are well-qualified buyers out there means sales are being secured in a timely manner for very good prices.”.

As you can see the slight dip in the number of sales across the two suburbs has also fallen in line with the volume of stock on the market, which is a healthy signal, we aren’t seeing sales and listings tracking on their own separate trends like in Mt Eliza currently. This is as much about seasonality as it is about a fundamental change in demand. What we are seeing, however, is prices holding steady or even slightly improved based on am improved demand from buyers seeking lifestyle properties in 2020. As we head into spring and summer, the listing volumes will return and so too will the buyers who are waiting patiently for their chance to purchase a holiday home.

Overall, for the entire Mornington Peninsula market, the combination of low levels of supply and the significant stimulus of historically-low interest rates will ensure that demand for properties for sale remains strong through the remainder of 2020. We expect the market to be strong right up until Christmas and into the summer holiday period along the Peninsula.

Inspections and property marketing have changed to adapt to temporary regulations which makes it harder for out-of-town buyers to locate, view and act quickly, which gives an upper hand to those with buyer representation and close relationships with the better agents.

As observed by the well-respected selling agents quoted above, the common theme is an influx of city buyers looking to get away from Melbourne, either for weekends or more permanently. As working from home is becoming the new norm, family balance and lifestyles are at the top of household priorities and the sea-change/tree-change trend is one that I expect to continue for the foreseeable future.

For those buyers who would like to understand how I operate and assist my clients to buy their piece of dirt, particularly in a post-COVID competitive market, pick up the phone or send me an email – I am only too happy to talk.

What a difference a month makes! We saw the writing on the wall with low stock levels and increased buyer demand in winter but needed confirmation it wasn’t just a knee-jerk reaction to greater Federal government stability and interest rate cuts.

September really kick-started the spring market right across the Peninsula. We saw properties that had been sitting on the market for a few months start to sell, some with appropriate price reductions and others with a change of agent and a freshened campaign.

September’s sales volume was hard to match in October and November, due to a lack of stock coming on to replace what has been mopped up. Buyers are out in numbers waiting for listings to show up in their searches, while selling agents are fielding numerous calls from buyers who can’t find anything on the market that suits their needs. You know the market is running hot when real estate agents don’t call you back!

Some of the properties that sat unsold for up to 12 months and finally did sell were 22a Morell Street Mornington by Dean Phillips of McEwing & Partners for $2.510M, on the market for 310 days; 8 Orchard Lane Mount Eliza by Jonathan Rivett of Eview Group for $1.8M, on the market for 332 days; and 19 Rockleigh Drive Mount Martha by Fergus Nutt of Warlimont & Nutt for $2M, on the market for a whopping 378 days. Some very patient vendors there.

It would also be remiss of me not to mention a couple of notable sales, “Beechwood” at 70 Bay Road Mount Martha by Trent Cameron of Warlimont & Nutt, a beautifully renovated farmhouse by renown interior designer and decorator Kate Walker. After holding out patiently for her price for four months, she appears to have gotten it from an out of town buyer. Trent has now been involved in multiple large sales in Mount Martha this year north of $4M. Lastly, the historically significant three-quarter-acre European beachside manor at 15 Marathon Drive Mount Eliza by Liz Todd of McEwing & Partners at the very top of the range of $4.05M in just a week on the market.

The scarcity of stock is now becoming a real problem. Yes, we are seeing new properties hit the market, but they are being snapped up very quickly – some in less than a week – especially homes that are priced correctly and well-styled, or rare offerings. In such an aspirational location to live, buyers need to feel that inspiration and lifestyle translate inside the home as well. In my opinion, this is more so here than anywhere else in Melbourne, so vendors – having your property styled is crucial.

Some of the properties that were snapped up quickly were 65 Fawkner Avenue Blairgowrie by Jellis Craig for $1.2M, in just 4 days; 4 Pearse Road Blairgowrie by Jacobs & Lowe for $2.25M, in 7 days; 719 Esplanade Mornington by McEwing & Partners for $2.7M, in 4 days; 11 Mount Eliza Way Mount Eliza by RT Edgar for $1.26M, in 7 days; 7 Walara Drive Mount Martha by Bonaccorde (undisclosed at the top of the range) in just 4 days; 35 Kilburn Grove Mount Martha by Warlimont & Nutt for $1.782M, in 7 days.

And let’s not leave out 14 Charlton Court Portsea and 18 King Street Sorrento, both with Kay & Burton and selling within 14 days. Most of these sales, and plenty of others just like it, have been in late October and early November. Is this a tale of things to come?

We’ve had an exceptionally cold, wet and windy start to spring, which hasn’t helped the local tourism bring in potential sea-change buyers from Melbourne. The Peninsula really starts to come into its own from now onwards, with holidaymakers coming down and holiday homes being sought. We have had a number of enquiries in November from clients about holiday home and potential Airbnb properties to purchase, from Mornington right through to Portsea.

The question on every potential vendor’s lips right now is, “have prices risen?”. We can see there are more buyers than sellers, and days on market coming right down, but are we seeing price increases?

I’m going out on limb here, but my data shows Flinders (albeit on a low sales volume) and Sorrento have recovered any 2019 falls and will potentially reach new median price highs, Portsea back to where it was at the last peak back in January, and suburbs such as Mount Eliza, Mount Martha, Mornington and Blairgowrie recovering more than half of their price falls since their last peaks.

Perhaps the difference in the market for vendors between winter and spring isn’t so much being nervous about selling, but now wanting to see new price highs before going to market. As we approach summer, the Mornington Peninsula market appears set to continue seeing strong buyer demand with low stock available to choose from.

This further highlights the need for a buyer’s advocate to uncover off-market properties and access pre-release homes before they go to market. We talk daily with our network of agents and have a database of off-market properties, ensuring you are getting access to all properties that may suit your requirements.

Please drop me an email below and start the conversation.

It is a bitterly cold 3-degree morning as I write this update on the Mornington Peninsula property market for Winter 2019.

Much like most of metropolitan Melbourne, the Peninsula property market has experienced decreased stock levels this winter which has translated to a lower number of sales and marginal price movements. Traditionally the winter months see lower levels of activity in coastal regions, and the further down the coast you go the number of lifestyle properties increase.

The positive impact on sentiment from the election result and the two recent interest rate cuts has resulted in an increase in buyers at open for inspections and we’re seeing properties that are presented well and priced correctly sell within a matter of weeks. Other properties that have been listed at last year’s prices and haven’t had a price reduction yet are still sitting unsold. Good opportunities exist for savvy buyers to put realistic offers in front of vendors who may now be bordering on desperate to sell. 

Since the school holidays, I’ve noticed a number of properties have sold, in particular, the homes around $850k-1.5m in Mount Eliza have been hotly contested and some are selling after as little as 2 weeks. There’s also been a buzz of activity in Mount Martha around the $1.5-2m price bracket with realistic vendors meeting the market. Mornington, on the other hand, has experienced a small decline in both the number of buyers and its median price since late 2018. It had been on a strong run up until that time and it will be interesting to see if spring listings can entice buyers back. We’re not seeing prices fall, but we’re not seeing prices rise either. This allows buyers to take their time and wait for the right property, or snap up an opportunistic purchase.

Mount Eliza has been the standout suburb in the northern part of the Peninsula, bucking the downward trend in price. Speaking with agents, anecdotally it seems that there’s an influx of city buyers looking to make a sea-change within a commutable distance. I wouldn’t be surprised if prices start to move in a positive direction unless we see an increase in stock, particularly if we see a further two interest rate cuts as predicted.

Nervous vendors appear to be waiting for Spring before they list their properties, as there’s still a shortage of stock in all price points listed for sale, however, we’ve got quite a few off-market properties and pre-release properties that we know about. Rather than waiting for Spring, we can show you through these prior to coming online and without the competition.

If you are considering a sea-change, looking to upgrade or downsize your home in the local Mornington Peninsula market, please get in touch for a confidential no-obligation chat.