Prestige properties priced above $1 million continue to attract competition and are selling well, often exceeding expectations (Barry Plant Dromana, early 2026). While some suburbs, including Sorrento, have seen median price drops of up to -3.2% (Barry Plant Dromana, early 2026), the high-end sector is supported by a dual buyer pool of Melbourne weekenders and retirees.
Demand for prestige Peninsula homes remains resilient despite a broader price correction from the COVID peak. While entry-level properties are adjusting, properties over $1 million are performing strongly due to structural supply constraints and a specific buyer demographic.
Competition for properties over $1 million
Properties in this bracket are selling well and frequently above expectations (Barry Plant Dromana, early 2026). This competition is driven by a dual buyer pool consisting of Melbourne holiday home seekers and a significant retiree population, predominantly aged 70–79 years.
Impact of the Short Stay Accommodation Levy
There is a noticeable increase in listings as investors dispose of ex-rental and holiday homes due to the Victoria Short Stay Accommodation Levy and higher land tax (Barry Plant Dromana, early 2026). This adds inventory to the market, but high-end buyers continue to compete for premium assets.
Long-term demand drivers
Supply is structurally limited by Green Wedge zoning and the Peninsula’s geography, which prevents significant urban expansion. This constraint, combined with an extremely tight vacancy rate of 0.6% (HtAG Analytics, March 2026), sustains interest from both permanent residents and investors.
The valuation gap
Some Peninsula suburbs have recorded median price drops of up to -3.2% (Barry Plant Dromana, early 2026), while others like Mt Eliza show marginal growth of +0.9% (CoreLogic/OpenAgent). The discrepancy between these corrections and the expectations of vendors who purchased during the COVID peak remains the primary point of friction in negotiations.
| Suburb | Median House Price | Annual Growth |
|---|---|---|
| Mt Eliza | $1,692,000 | +0.9% (CoreLogic/OpenAgent) |
| St Andrew’s Beach | $1,593,700 | +0.5% (CoreLogic/OpenAgent) |
| Safety Beach | $1,160,700 | +0.3% (CoreLogic/OpenAgent) |
| Mornington | $1.07M–$1.12M | -2.73% to -4.11% (CoreLogic/OpenAgent) |
Frequently asked questions
What is the best sale method for a prestige home on the Peninsula?
For properties priced above $1.5 million, private treaty or Expressions of Interest (EOI) are the dominant methods (RAG Context). Auctions are used more selectively on the Peninsula, typically for affordable properties in Mornington and Rosebud or where multiple competing buyers have already been identified by the agent.
How is the short-stay levy affecting property prices?
The levy has led to an increase in listings as investors dispose of holiday homes and ex-rental properties (Barry Plant Dromana, early 2026). While this increases supply, properties priced above $1 million continue to sell well, whereas entry-level properties are offering more value opportunities as the market adjusts.
How fast are homes selling in the Mornington area?
The median selling speed in Mornington is 36 days (HtAG Analytics, March 2026), which is faster than the Victorian median of 42 days. Units are moving even faster, with a median of 30 days compared to 38 days for houses in the same area.
Who is currently buying prestige property in Sorrento and Portsea?
Competition comes from two primary groups: permanent residents, including a large retiree and semi-retiree population aged 70–79, and Melbourne-based buyers seeking weekend or holiday homes. Both groups are attracted by the coastal lifestyle, wineries, and proximity to the Peninsula Link Freeway.
Questions to ask your agent
- How does the current volume of ex-rental listings in my specific street affect my property’s leverage?
- Given the “Accelerating Growth” phase identified by HtAG Analytics for the broader region, what is the projected momentum for the next 12 months?
- Which specific buyer profile—Melbourne weekenders or local retirees—is currently showing the most urgency for my home’s specific features?
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.