Melbourne buyers remain active on the Mornington Peninsula, particularly in the premium segment where properties above $1 million continue to sell well and often exceed expectations (Barry Plant Dromana, early 2026). While some coastal suburbs, including Sorrento, saw median house price drops of up to -3.2% (Barry Plant Dromana, early 2026), the broader region is currently in an “Accelerating Growth” phase (HtAG Analytics, March 2026).
The 2026 rate rises have shifted buyer behavior, creating a divergence between entry-level and premium assets. We are seeing a market adjustment from the COVID peak, paired with an increase in listings as investors exit the short-stay market.
High-end demand vs entry-level value
Buyer appetite remains strong for premium coastal assets. Properties priced above $1 million are selling well and frequently exceeding expectations (Barry Plant Dromana, early 2026). Conversely, properties below the $1 million mark are offering more value opportunities as the market adjusts from previous peaks.
The exit of short-stay investors
Increased land tax, interest rates, and the introduction of Victoria’s Short Stay Accommodation Levy are prompting investors to dispose of holiday homes (Barry Plant Dromana, early 2026). This has led to a higher volume of ex-rental properties entering the market, particularly in coastal pockets.
Selling speed and cycle momentum
Mornington is currently in the “Accelerating Growth” phase of the property cycle, a stage that historically maintains momentum for 12–18 months (HtAG Analytics, March 2026). Selling speed remains competitive, with a median of 36 days (HtAG Analytics, March 2026), which is faster than the Victorian median of 42 days.
The valuation disconnect
There is a visible gap between generic median data and actual transaction results. While some data points place the Mornington township median between $1.07M and $1.12M (CoreLogic/OpenAgent), actual transaction data shows typical prices ranging from $1,200,000 to $1,400,000 (HtAG Analytics, March 2026).
| Property Type (Mornington) | Median Price | Annual Growth | Median Days on Market |
|---|---|---|---|
| Houses (CoreLogic/OpenAgent) | $1.07M–$1.12M | -2.73% to -4.11% | 38 days |
| Units (OpenAgent) | $755,000–$760,000 | +8.8% | 30 days |
The supply constraint risk
The primary uncertainty for vendors is the balance between increased investor listings and the inherent lack of new land. Geography and Green Wedge zoning prevent urban expansion, which supports long-term stability but creates volatility in the short term as investors liquidate portfolios.
Frequently asked questions
What is the current selling speed on the Mornington Peninsula?
Properties are moving relatively quickly. In Mornington, the median days on market is 36 days (HtAG Analytics, March 2026), which is notably faster than the broader Victorian median of 42 days. Units are moving even faster, with a median of 30 days (OpenAgent).
Are holiday homes still a viable investment in 2026?
The landscape has changed due to the Victoria Short Stay Accommodation Levy, higher land tax, and interest rate rises. These factors have led many investors to sell their holiday rentals (Barry Plant Dromana, early 2026), although tight vacancy rates of 0.6% (HtAG Analytics, March 2026) continue to attract some interest.
Which sale method works best for the Peninsula market?
Private treaty is the dominant method on the Peninsula. Auctions are used more selectively, typically for properties priced between $700,000 and $1.2 million in areas like Mornington and Rosebud where family buyer competition is higher. Most listings above $1.5 million utilise private treaty or Expressions of Interest.
Is there still growth potential for Mornington properties?
HtAG Analytics (March 2026) classifies Mornington, Balnarring, and Baxter as being in the “Accelerating Growth” phase. Historically, suburbs in this phase of the property cycle see continued momentum over the following 12 to 18 months, despite some recent flat or marginal price growth.
Questions to ask your agent
- How has the increase in ex-rental stock in my specific street affected the pool of active buyers?
- Given the “Accelerating Growth” phase data, should we list now or wait to capture the 12–18 month momentum?
- What specific transaction data, beyond the median, supports the price guide you are recommending for my property?
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.