As we momentarily stop to gather our thoughts, and reflect on the year that will be etched in our memories forever, a sense of nervous relief and gratitude washes over many of us. We’ve been through the highs and lows of a roller coaster 12 months. Some have fared better than others, but some have lost loved ones and others have had businesses devastated or careers turned upside down. Our human spirit has continued to shine on through strength and resilience, community solidarity and an optimism that we’ve been through tough times together and have made it out the other side. Cautious that we could just as easily slip back in to where we’ve been.
There has been a monumental shift in mindset from keeping up with the Joneses, to placing more emphasis on family, lifestyle and work-life balance. This in turn has made the Mornington Peninsula one of the most desired parts of Australia to live. No longer is the 1-1.5hr commute seen as prohibitive for city workers now that the full time office desk role is less of a requirement. The mixture of country and coast, affordability, space and lifestyle, yet still being able to retain city jobs, has driven a huge surge in sea change buyers.
The other huge shift has been the demand for holiday homes since overseas travel has been temporarily suspended. The ability to generate short term rental income through airbnb and stayz, while also having personal use, coupled with the lowest interest rates in history, has made the prospect of holidays on the Mornington Peninsula even more attractive than usual.
The only problem with an increased number of buyers, is that there needs to be enough supply of homes for sale to keep the market in equilibrium. Without enough supply, the only outcome is price rises between competing buyers. Local home owners are simply not selling unless they need to, because summer is the best time of year to use the holiday house or rent it out. The year-on-year demand in Victoria is up by 71.8% which is the largest in Australia, with New South Wales second at 54.4%. You can see in the REA weekly demand insights chart below, that we’re still way above the long term average for demand, and it’s only tapering off momentarily for the Christmas break.
What is left is a stock shortage that is being largely bought by out of town buyers, without a house to put on the market once they’ve bought. Quite simply, it’s a one dimensional market where sellers hold all the power. It’s honestly like watching seagulls fight over a chip in some cases. I’ll touch on a few examples of this below in the local reports. Properties that have an aspirational aspect are the most sought after. For example, a view of the water or a walk to the beach, a tastefully renovated or staged home that exhibits wow. These types of properties are moving so fast that agent quotes can’t keep up with the rising prices.
Below is my market wrap for the year in each of the major markets on the Mornington Peninsula.
- Northern Tip
- Around the Hill
- Southern End
It’s a tale of the quick and the dead for A-grade homes in Mt Eliza and Mt Martha. As I wrote in my Spring 2020 review, the Mt Eliza market still slightly trails Mt Martha in terms of transaction numbers however the gap is closing and both suburbs are now in a sellers market. The good homes are selling within a week, some within a matter of days, and now that public open for inspections are allowed again, there’s lines out the front yards and up the street to get in to some of these homes. The forgotten listings from early in the year all started selling too, with properties like 20 Jackson St, 4 Craigie Rd and 4 Lea St, all in Mt Martha, finally selling for close to their asking price. Some big ones sold too, like 5 Prescott Ave with Nicholas Lynch for mid $6M’s, and 1 Barristers Lane with Warlimont & Nutt for mid $5M’s. In Mt Eliza, some big ones at 5 Denistoun Ave and 19 Watts Pde for high and mid $6M’s and a spattering of homes in Watts, Jacksons, Almeria and Glen Shian between mid $3M’s and mid $4M’s.
I spoke with Trent Cameron, Director of Warlimont & Nutt, who told me “We all know how much of a rollercoaster this year has been. During the lockdown period, we anticipated a strong return for the property market however it’s surpassed our expectations. A persistent lack of stock, increased ability for those to work from home and low interest rates have all contributed to a booming market where we are consistently selling homes for asking price and above and also off-market.”
Some notable sales from Trent’s office include the off-market at 40 Prescott Ave $3.4m (off the plan) and 1 Barristers Lane with a South Beach boat shed for $5.5m, plus recently a great result at 37 Dickinson Grove fetching $1.72m (above asking, with multiple bidders).
Confidence has returned in spades around the hill. The large properties have returned and construction has also been active again. The listed acreages have been far and few between though, and consequently the market below $6M has incredible buyer depth. The result is that properties are selling in some cases 20-30% above the expectation with some glaring results in Flinders and Main Ridge.
164 Keys Rd, a small 2-acre property with an original log cabin home and distant water glimpses. The statement of information estimated a selling range of $2-2.2M. Peter Kennett of RT Edgar performed a stellar auction whereby the opening bid was accepted at $2.4M and quickly countered at $2.6M. Two or three bidders then fought it out right up to $3,010,000.
79 Tucks Rd, a lovely 10-acre property with valley views, beautifully renovated modest home, offered by Tom Barr Smith & Meg Pell of Kay & Burton. The statement of information estimated a selling range of $4.3-4.7M. An acceptable offer triggered an auction whereby the eventual lucky bidder paid in the high $5Ms.
I spoke with Meg Pell from Kay & Burton who told me “Properties are selling quicker and at higher prices, particularly acreage Meg said. She said competition is brisk at auctions and sale prices as much as 20% or in some recent cases more than 20% over the asking price are being paid. Normally at this time of the year things are winding down a bit, but to the contrary. It really is a seller’s market at present.”
The standout beachside performer this year in my opinion has to be Blairgowrie, with consistently strong results on a fairly regular supply of listings. Omitted in my Spring 2020 Review, I was quickly reminded of the reason why this sleepy beachside suburb should not be overlooked. The allure of holiday homes has been the major driver of demand in this area. The Tyrone Foreshore fringe of Blairgowrie has mirrored its neighbour’s strong demand too, with affordable homes amongst the ti-tree just a stones throw to the beach and Blairgowrie shops. I’m no longer surprised with runaway sales in this location, and just when I think maybe the market is starting to ease, I’m blown away with another strong result.
An agent who is having a large impact on the market there currently is Fletchers’ Director Joshua Callaghan, who shared the following with me.
“Post lockdown 1.0 we experienced a surge in buyer demand through May & June with 70% of our 24 sales for the 8 week period having a minimum of 3 offers per property including 6 Scott Wynd, Blairgowrie which we successfully procured a sale in just 5 days for $3,125,000 which was the second highest price for a bayside location in Blairgowrie; the highest being $3,150,000 for a property we sold in November 2019 at 1-3 Head Street, Blairgowrie.
Fast forward to the recent past months post lock down 2.0 and we experienced what I would refer to as one of the most inefficient operations for real estate The strength is definitely there in this southern end market, however there is still a lack of stock coming to the market to meet the number of buyers on the sidelines. There was really only a dozen or so sales in Portsea in the last quarter, with homes like 92 Blair Ct in the mid $4M’s, after that a couple in the mid $3M’s and the rest between $1.5M and $3M. We saw some older listings in Sorrento eventually sell such as 12 Collins Pde for $3.2M and 3 Ozone Ave for $2.75M, both on the market over 280 days. We also saw the other end of the spectrum with 8 Aviemore, 30 Yatala, 6 Hiskens, 26 Pekina all selling in or under a week. Three or four big ones along Pt Nepean also sold above $4M.
I asked Clayton Smith of Rt Edgar for his thoughts on the year and he told me “Following a tumultuous year of uncertainty with lockdowns and travel restrictions in general, the middle of the year was all about flattening the curve and as Spring arrived, thoughts turned to where our holidays would be spent this Christmas. The easing of restrictions at the start of October saw unprecedented demand from buyers seeking a holiday home, upgrading to a larger home or a sea-change for the family with the new found flexibility of working from home becoming a reality for many. Our phones rang hot, one on one inspections were booked in 15 minute blocks as countless buyers swooped to snap up a piece of coastal paradise. In many instances properties were listed and sold within a matter of 3 or 4 days with Zoom auctions fast becoming the norm.”Some notable sales from RT Edgar Portsea and Sorrento include 6 Hiskens St, Sorrento, a stunning Hampton’s inspired brand new 5 bedroom home with pool on just over 500sqm of land selling in excess of $3M, two single level 4 bedroom homes in Settler’s Cove Sorrento sold in a matter of days in excess of $2M, and a single level 4 bedroom home with pool near St Johns Church situated on a superb land holding in excess of 1 acre with views over the Sorrento Gold Course and Lagoon selling off-market in excess of $4M. Southern End Blairgowrie The standout beachside performer this year in my opinion has to be Blairgowrie, with consistently strong results on a fairly regular supply of listings. Omitted in my Spring 2020 Review, I was quickly reminded of the reason why this sleepy beachside suburb should not be overlooked. The allure of holiday homes has been the major driver of demand in this area. The Tyrone Foreshore fringe of Blairgowrie has mirrored its neighbour’s strong demand too, with affordable homes amongst the ti-tree just a stones throw to the beach and Blairgowrie shops. I’m no longer surprised with runaway sales in this location, and just when I think maybe the market is starting to ease, I’m blown away with another strong result.
An agent who is having a large impact on the market there currently is Fletchers’ Director Joshua Callaghan, who shared the following with me.“Post lockdown 1.0 we experienced a surge in buyer demand through May & June with 70% of our 24 sales for the 8 week period having a minimum of 3 offers per property including 6 Scott Wynd, Blairgowrie which we successfully procured a sale in just 5 days for $3,125,000 which was the second highest price for a bayside location in Blairgowrie; the highest being $3,150,000 for a property we sold in November 2019 at 1-3 Head Street, Blairgowrie. Fast forward to the recent past months post lock down 2.0 and we experienced what I would refer to as one of the most inefficient operations for real estate with the restriction imposed on property appraisals and inspections. This combination kept stock levels incredibly light and a frenzy of buyers allocated strict 15-minute inspection blocks. During this period, the method of sale employed on various properties was key to ensure Vendor’s were placed into a position of having genuine buyer competition that resulted in some excellent sale results; one during this period was a standout result at 60 Garden Street, Blairgowrie selling for almost $500,000 above the Vendor’s expectations. As restrictions started to ease, we opted to bring then new listings in as Auction campaigns and subsequently were the first agency to engage in public Auctions which for the final week of their campaigns was in sync with the first weekend of open space numbers being completely lifted. This calculated foresight and albeit a gamble paid off big time for our Vendor’s with market changing results on one day such as 73 Garden Street, Blairgowrie selling for $1,603,000 ($683,000 above reserve), 38 Dana Ave, Blairgowrie selling for $885,000 ($165,000 above reserve), 40 Dana Ave, Blairgowrie selling for $905,000 ($185,000 above reserve). The following weekend we took 32 Gordon Street Rye to Auction which sold for $1,300,000 under the hammer ($280,000 above reserve) and on the same day we procured 6 written offers on a property at 27 Valentine St, rye selling for $1,180,000”.
It certainly doesn’t look like the market on the Mornington Peninsula is showing any signs of slowing down. It would have to take a serious economic shockwave to deter the amount of out-of-town buyers we’re seeing. Prices have risen between 10 and 30 percent from Mt Eliza to Flinders to Sorrento and everything in between. It is extremely difficult to buy property at the moment, you need to be educated, decisive, have a strategy and move quickly. If you’re up in Melbourne, the odds are against you unless you’re able to drop everything at a moments notice and head down the freeway, for the next 6 months which is the average time to buy property down here.
The agents I’m speaking with all have listings ready to launch in mid-January. There will be a period like we saw as we came out of lockdown where stock was listed and snapped up in days. This is likely to happen again towards the end of January as holiday makers turn to sea-changers, and those that missed out in 2020 pick themselves up with renewed confidence and vigour. It will be strong all the way to Easter, and then after that, only time will tell. The COVID-19 vaccine will be making its way through the population of the world and international travel will soon be back on the cards. This may have a cooling effect on the market on the Peninsula, allowing transactions to return to a normal dynamic.
The past 3 out of 5 properties I’ve bought for clients have been off-market. In a rising market, this is almost impossible to do, but with relationships and local knowledge, it can be done. Contact me to see what I’ve got in the way of off-market listings in my database, there might be one that matches your search brief. Nonetheless, having a local expert on the ground, with a finger on the pulse of prices and knowing where to buy could be the difference between you being successful or missing out. Talk to me today and I’ll give you an honest opinion of the likelihood of what you’re trying to achieve. I may even be able to find and secure your dream home, just like I did in 2020 for my successful clients in the hottest market we’ve almost ever seen.
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.Read more about Michael Sier
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