Suburb spotlight: Mornington market on the improve

Flanked by beautiful beaches and a distinct suburban charm, the Mornington Peninsula property market has been doing well this year – possibly reaping the benefits of the Melbourne property market.

Australian Property Monitors senior economist Dr Andrew Wilson told Property Observer that Mornington is a “popular market”, as it is the gateway onto the Peninsula.

“It is a lifestyle market to a large degree, with many who choose to commute to the CBD,” he said.

He notes that the Mornington area’s individual characteristics are a draw. 

“It’s an old part of Victoria. Like Mornington Shopping Centre, it’s very quaint. There’s a charm about it that attracts particular buyers, and that sees healthy sales numbers,” he said.

Dr Wilson added that the Mornington area has seen some redevelopment projects.

“There are a lot of older properties there that have been redeveloped, and some medium density developments have gone into the area,” he said.

This unique old-meets-new mix has contributed to a “boutique wave” in Mornington, which has proven to be popular.

“The median house price is $500,000, and is at its peak level,” Dr Wilson said.

Barry Plant Mornington director John Karras told Property Observer the Mornington property market is “definitely improving”. Sales have increased since this time last year, and he notes that “spring has been very good”.

“There’s continued confidence in the marketplace, together with low interest rates, and prices of properties are at a good level. Buyers are more confident and prices are more acceptable,” he said.

He added that buyer activity is still primarily made up of private buyers, though there has been an increase in investor enquiries in the last 12 months. 

However, he disagrees with Dr Wilson’s assessment that the house market is at its peak.

“There’s definitely room for growth there, the demand will cause house prices to rise if anything,” he said.

Karras notes that the Mornington property market is usually synonymous with the Melbourne property market.

“Next year should be a good year – we should see an increase in prices. We’ll definitely see that in town, and it usually ripples down to Mornington,” he said.

“There’s going to be a good opportunity for both buyers and sellers. It’s a good market now. Consumer confidence is there, and more will take that next step to buy a nicer home,” he added.

As for suburbs to look out for, he believes Mornington has the infrastructure, medical facilities, and lifestyle that would attract buyers.

“With the Eastlink coming all the way down, it’s very accessible. Plus the cafes and restaurants in Mornington, it’s like a St Kilda down on the Peninsula,” he said.  

Next up on the list would be Mount Martha, as holidaymakers tend to purchase properties there. 

Stuart Cox of Jacobs and Lowe agrees that Mornington and Mount Martha are the suburbs to watch, though he thinks Safety Beach and Dromana are up next.

"Safety Beach and Dromana have a very high absentee ownership and we expect that these areas could become the next major growth areas as families who have held this land for generations realise the potential value," he said.

He also notes that the Mornington property market has picked up in the last two months, "particularly since the federal election". 

Cox added that there has been an excess of units on the market in Mornington, and not enough houses, causing unit prices to drop slightly on last year according to the latest RP Data report.

"We have had several homes which have recently sold with 1-2 days of reaching the market, and many of them with 2-3 competing buyers in a private sale situation," he said.

Cox also said that homes that reach 25-30 years of age are being knocked down for future development. 

"Land value in Mornington on the beachside of the highway averages approximately $1000 per square metre for developers to purchase and construct multiple units," he said.

According to the latest RP Data report, the median sale price for houses in Mornington is $513,500, up 0.5% on last year. The average discount required to sell a house is 7%, while private treaty sales average 87 days on market.

The median asking rent for houses in Mornington is $395 a week, while gross rental yield currently stands at 4%. 

The median sale prices for units in Mornington is $398,500, down 2.6% on last year. The average discount required to sell a unit is 5.9%, while private treaty sales average 82 days on market. 

The median asking rent for units in Mornington is $320 per week, while gross rental yield currently stands at 4.2%.

dleow@propertyobserver.com.au