Rye and Rosebud are currently experiencing a market adjustment following the COVID-era boom, with house prices down between -2.73% and -4.11% depending on the source (CoreLogic/OpenAgent, early 2026). However, the broader Mornington Peninsula is in an “Accelerating Growth” phase (HtAG Analytics, March 2026), suggesting potential for renewed momentum. Increased listings from short-stay investors impacted by the new Victorian Short Stay Accommodation Levy are adding supply, particularly for properties above $1 million.
Selling in Rye or Rosebud in 2026 requires a nuanced understanding of the current market dynamics. While recent price growth has been flat to negative, the underlying conditions suggest the Peninsula is poised for a re-rating, but the impact of increased supply from investors needs careful consideration.
What’s happening with house prices in Rye and Rosebud?
Early 2026 data shows a correction from the peak of the market. House prices in the broader Mornington Peninsula, including Rye and Rosebud, have recorded drops of up to -3.2% (Barry Plant Dromana, early 2026). Mornington township’s median house price is approximately $1.07M–$1.12M (CoreLogic/OpenAgent), with HtAG Analytics placing typical transaction prices between $1,200,000 and $1,400,000 (March 2026). Days on market are currently averaging 36–38 days, faster than the Victorian median of 42 days.
How is the Short Stay Accommodation Levy affecting the market?
Victoria’s Short Stay Accommodation Levy, and the associated increase to the Emergency Services Levy for non-principal places of residence from 1 July 2026, is driving a significant number of investment properties onto the market (Barry Plant Dromana, early 2026). Many former holiday rentals are being sold by investors due to increased land tax and interest rates. This is increasing supply, particularly in Rye, Rosebud, Dromana, Capel Sound, and Mornington, and creating downward pressure in those segments.
Are units a better option than houses right now?
Units are currently selling faster than houses in Mornington. The median days on market for units is 30 days compared to 38 days for houses (early 2026). Unit prices are also showing stronger growth, with an annual increase of +8.8% (OpenAgent), while house prices have seen a decline. The unit median price in Mornington is $755,000–$760,000.
The real uncertainty — the investor exit velocity
The full extent of the investor exit from the short-stay market remains uncertain. While we’re seeing a clear increase in listings, it’s difficult to predict how many more properties will come onto the market as owners fully assess the financial impact of the new levy and increased costs. This ongoing supply pressure is the biggest risk to price stability in the short term.
Frequently asked questions
Will the market improve before winter?
The Mornington Peninsula is currently in an “Accelerating Growth” phase (HtAG Analytics, March 2026), historically indicating continued momentum over the next 12–18 months. However, recent RBA rate hikes have introduced caution (Domain), so a significant uplift before winter isn’t guaranteed. Vendor confidence improved in late 2025, but buyer urgency has dampened.
What’s happening with vacancy rates?
Vacancy rates across the Peninsula remain extremely tight, at just 0.6% (March 2026). This strong demand for rentals supports property values long-term, even with increased supply from investor sales. A low vacancy rate suggests continued rental income potential for investors who choose to retain their properties.
Are buyers still willing to pay premium prices?
Properties priced above $1 million are still selling well and often above expectations. The market is discerning, and well-presented, strategically positioned properties continue to attract strong interest. Entry-level properties (below $1M) are offering value opportunities as the market adjusts.
What impact are the interest rate rises having?
The February and March 2026 RBA rate hikes have introduced a new level of caution among buyers (Domain’s Dr Nicola Powell). While demand hasn’t disappeared, buyers are taking more time to make decisions and are more sensitive to pricing. This is lengthening the sales cycle slightly.
Questions to ask your agent
- Based on recent sales of comparable properties, what is a realistic price range for my home in the current market?
- What strategies will you employ to attract buyers specifically looking for properties like mine, given the increased supply from short-stay investors?
- Can you provide a detailed breakdown of marketing costs and a clear explanation of your commission structure?
This article contains general market information based on data current
as at April 2026. It does not constitute financial, legal, or real estate
advice specific to your property or circumstances. For an appraisal and
tailored advice, speak with a Fletchers agent in your area.