The introduction of Victoria’s Short Stay Accommodation Levy, alongside rising land taxes and interest rates, has prompted investors to dispose of holiday assets (Barry Plant Dromana). This has increased listing volumes, causing entry-level properties below $1 million to undergo a price correction, while prestige properties above $1 million continue to sell well and often exceed expectations (Barry Plant Dromana).
The Bellarine Peninsula is currently transitioning from a period of investor-led demand to a market more defined by lifestyle buyers. This shift is most evident in the increased volume of ex-rental properties entering the market as holding costs rise.
Impact of the Short Stay Accommodation Levy
Investors are increasingly exiting the short-stay market due to the new levy and heightened land taxes (Barry Plant Dromana). This trend is creating a surge in listings for holiday homes, particularly in the entry-level bracket, which is now adjusting from the COVID peak (Barry Plant Dromana).
Performance by price bracket
There is a clear divergence in value based on price point. Properties priced above $1 million remain strong and are selling above expectations (Barry Plant Dromana), whereas Ocean Grove has seen a median house price of $1,039,067 with an annual correction of -6.19% (CoreLogic/Cotality/Domain/PropTrack/REIV/RBA/ATO).
Demand in coastal hubs
Tight supply continues to support prices in Barwon Heads, Point Lonsdale, and Queenscliff, where lifestyle buyer demand remains high. In nearby Armstrong Creek, buyer enquiry levels have reached their highest point in two years (Bellarine Times, late 2025).
The entry-level floor
The primary uncertainty is the exact floor for properties priced under $1 million. While the luxury end is resilient, the market is still absorbing the influx of ex-rental stock, making it difficult to pinpoint when the correction for entry-level assets will stabilise.
| Location | Median House Price | Annual Change/Growth |
|---|---|---|
| Ocean Grove | $1,039,067 | -6.19% (Correction) |
| Geelong | $890,000–$945,000 | +1.2% (Through 2025) |
Frequently asked questions
Should I sell my Bellarine holiday home now?
Investors are currently listing holiday homes due to the Short Stay Accommodation Levy and increased land taxes (Barry Plant Dromana). If your property is valued above $1 million, demand remains strong. Entry-level properties are currently adjusting from the COVID peak, which may impact your final sale price.
Are short-stay properties harder to sell than permanent residences?
Market listings are currently dominated by ex-rental properties (Barry Plant Dromana). While prestige homes over $1 million are selling well, entry-level investment stock faces more competition as more investors offload assets. Success depends on whether the property appeals to lifestyle buyers or strictly as an investment.
How is the Geelong market affecting the Bellarine Peninsula?
Geelong serves as the gateway to the region and is transitioning out of a correction phase, with annual growth of approximately +1.2% through 2025 (Bellarine Times/WhichRealEstateAgent/HtAG Analytics). This stability provides a baseline for the broader region, though coastal towns exhibit different supply-demand dynamics.
Why are some Bellarine suburbs seeing price corrections?
Suburbs like Ocean Grove have seen a -6.19% annual correction as the market adjusts from the COVID peak (CoreLogic/Cotality/Domain/PropTrack/REIV/RBA/ATO). This is driven by a combination of higher interest rates and investors exiting the short-stay market due to new state levies and taxes.
Questions to ask your agent
- How many ex-rental properties have sold in my immediate street or precinct in the last six months?
- What is the current percentage difference in sale price between lifestyle buyers and short-stay investors for my property type?
- Which specific buyer demographics are currently driving the demand for properties over $1 million in the Bellarine region?
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.