The auctions are going to be a hot this summer: Mornington Peninsula state of the market

High expectations were placed on a bumper spring this season, with experts predicting our biggest property sales period in years. With record low interest rates and the election finally decided, talks of improved consumer confidence reached new heights.

It’s a little different for us down here in the Peninsula – unlike the rest of Melbourne our peak selling period is over the summer months. Don’t get me wrong, spring is still a busy period for us but I’d say we’re more in ‘ramp-up’ mode for the holiday season when our real estate frenzy really hits.

Photo courtesy of Kevin Yank/flickr.

For the last 11 years, I’ve had my vendors tell me from as early as August that they’re happy to go on the market in spring; it was no different this year. Come the first day of September, we were away and racing.

One of the most interesting trends we’ve noticed this season is the rise of the auction. For holiday home markets like Rosebud, Dromana and Safety Beach where private sales have traditionally dominated, this spring we’re seeing a 70:30 split between auctions and private sales in favour of auctions. We have already conducted 10 auctions this spring alone - five years ago I’d be lucky if I had three auctions for the entire year. The hype around auctions in the broader Melbourne market has definitely started to trickle down to our area, with sellers beginning to see value in this sale method.

There’s also been a noticeable change in sentiment since the change in government – we found a lot of our vendors were fearful to sell before the election. September this year was a huge month for us with our sales nearly double the same time last year. We’ve also had really strong results this month with these properties in Dromana and Rosebud selling before auction and we’re expecting the same to happen to a four-bedroom home we have in Phillip St Rosebud.

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We’ve also just listed a unique acreage – 60 Old White Hill Road Dromana – that will draw a lot of interest from retirees and holidaymakers.

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Looking at buyer demand, the interest rate cuts have definitely made a difference but we’ve actually found the completion of the Peninsula Link in January to be the biggest driver for our market this year. People can now get to the Peninsula from the city in under an hour – before the freeway was open, you’d be looking at an average travel time of one and half to two hours depending on traffic. Our days on market have halved from an average of 120 days a year or two ago, to 60 days this year.

The other unique trend we’ve seen this spring has been in the rental market (which has shown particularly strong demand, we had more than 60 enquiries for a three-bedroom home we recently put on the rental market in Safety Beach). We’ve had a few instances where people have chosen to lease a holiday home for the entire year after weighing up the benefits of outlaying $400-$500 a week rent for a year against mortgage repayments for 30 years. We’re finding that professionals in the 40-50 age bracket with disposable income are considering different ways to invest their money.

We’re definitely expecting stock levels and buyer demand to remain high moving into summer, with our activity really ramping up in January – I’m predicting a nominal increase in our sale prices and another interest rate cut before Christmas. But predicting interest rates is like predicting real estate; everyone thinks they know what’s going to happen when the truth is, no one actually knows what’s around the corner. All I know is if our results so far are anything to go by, I can guarantee it’s going to be a hot summer.