Mornington Peninsula Spring 2020 Market Update

Balanced market
Mount Eliza

Jun – Dec 2019 (7 Months)
Number of sales: 206
Value of sales: $295,580,590
Median price: $1,197,500
Biggest sale: $7,045,000

Jan – Jul 2020 (7 Months)
Number of sales: 138
Value of sales: $190,085,009
Median price: $1,280,000
Biggest sale: $5,300,000

Mount Martha

Jun – Dec 2019 (7 Months)
Number of sales: 181
Value of sales: $228,361,134
Median price: $1,080,000
Biggest sale: $4,400,000

Jan – Jul 2020 (7 Months)
Number of sales: 165
Value of sales: $208,456,800
Median price: $1,176,500
Biggest sale: $5,000,000

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.

Sellers’ Market

Jun – Dec 2019 (7 Months)
Number of sales: 48
Value of sales: $113,706,000
Median price: $2,080,000
Biggest sale: $13,700,000 (Flinders)

Jan – Jul 2020 (7 Months)
Number of sales: 42
Value of sales: $56,026,000
Median price: $1,530,000
Biggest sale: $5,000,000 (Flinders)

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.

Balanced market

Jun – Dec 2019 (7 Months)
Number of sales: 97
Value of sales: $198,029,500
Median price: $1,562,500
Biggest sale: $19,815,000 (Portsea)

Jan – Jul 2020 (7 Months)
Number of sales: 81
Value of sales: $150,290,668
Median price: $1,775,000
Biggest sale: $13,480,000 (Portsea)

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.