Buyer appetite on the Mornington Peninsula is split by price point. Properties priced above $1 million are selling well and often exceeding expectations, while entry-level homes below $1 million are seeing a price correction as the market adjusts from the COVID peak (Barry Plant Dromana, early 2026).
The Peninsula market is currently defined by a divergence in value. While high-end coastal assets remain resilient, several neighbouring suburbs have recorded median house price drops of up to -3.2% (Barry Plant Dromana, early 2026).
The divide between luxury and entry-level
Strong prices are being maintained for premium properties above the $1 million mark. Conversely, properties below $1 million are offering more value opportunities as they undergo a market adjustment (Barry Plant Dromana, early 2026).
Investor exits and the Short Stay Levy
Listing volumes are currently dominated by ex-rental and holiday homes. Many investors are disposing of these assets due to increased land tax, higher interest rates, and the introduction of Victoria’s Short Stay Accommodation Levy (Barry Plant Dromana, early 2026).
The Peninsula’s growth cycle
Mornington, Balnarring, and Baxter are currently in the “Accelerating Growth” phase of the property cycle (HtAG Analytics, March 2026). Historically, suburbs in this phase maintain momentum for 12–18 months, despite recent flat-to-marginal price growth.
The appraisal spread
There is significant variance in pricing outcomes based on the property’s target buyer. A home appealing to the 70–79 age demographic or a Melbourne weekender may achieve a very different result than a standard investment property.
| Suburb | Median House Price | Annual Growth |
|---|---|---|
| Mt Eliza | $1,692,000 | +0.9% |
| St Andrew’s Beach | $1,593,700 | +0.5% |
| Safety Beach | $1,160,700 | +0.3% |
| Mornington | $1.07M–$1.12M (CoreLogic/OpenAgent) | -2.73% to -4.11% |
Frequently asked questions
Is now a good time to sell my holiday home on the Peninsula?
High-end properties above $1 million are currently selling well and often exceeding expectations (Barry Plant Dromana, early 2026). However, the market is seeing an influx of short-stay investment properties due to the new accommodation levy, which may increase competition for entry-level holiday homes.
Why are some coastal properties seeing price drops?
Suburbs including Dromana, Sorrento, and Mount Martha have seen median house price drops of up to -3.2% (Barry Plant Dromana, early 2026). This reflects a price correction as the market adjusts from the peak of the COVID-19 period, particularly for properties under $1 million.
How is the short-stay levy affecting property prices?
The Victoria Short Stay Accommodation Levy, combined with higher land tax and interest rates, is prompting investors to sell (Barry Plant Dromana, early 2026). This has increased the supply of former rental and holiday homes entering the market in early 2026.
Are Melbourne buyers still interested in Peninsula coastal homes?
Yes, demand remains consistent from a dual buyer pool of permanent residents and Melbourne weekender buyers. The Peninsula’s limited geography and Green Wedge zoning prevent significant urban expansion, maintaining a baseline of scarcity and long-term appeal.
Questions to ask your agent
- What is the current volume of ex-rental holiday homes listing in my immediate street?
- How does my property’s price point align with the current strength of buyers spending over $1 million?
- Based on the current “Accelerating Growth” phase, what is the projected momentum for my specific suburb over the next 12 months?
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.