Yes, prestige buyers remain active. Properties priced above $1 million are selling well and often exceeding expectations, despite broader median price corrections in the region. This demand is sustained by a dual buyer pool of Melbourne weekenders and permanent retirees.
The prestige market on the Mornington Peninsula is currently operating independently of the entry-level sector. While some suburbs, including Sorrento, recorded median house price drops of up to -3.2% in early 2026 (Barry Plant Dromana), high-value assets continue to attract strong interest.
Performance of properties over $1 million
Properties priced above $1 million are selling well and frequently exceed expectations. This contrasts with entry-level properties below $1 million, which are currently offering more value opportunities as the market adjusts from the COVID peak.
Buyer demographics and demand
Demand is driven by a dual pool of Melbourne-based holiday home buyers and permanent residents, with the predominant age group being 70–79 years. This stability is reinforced by high owner-occupier rates, with 43.7% of Mornington properties owned outright.
Supply and sale methods
Supply is strictly limited by Peninsula geography, including Green Wedge zoning and boundaries formed by Port Phillip Bay and Western Port. For listings above $1.5 million, the market almost exclusively uses private treaty or Expressions of Interest (EOI) rather than auctions.
The short-stay levy risk
The introduction of Victoria’s Short Stay Accommodation Levy is increasing the volume of holiday homes entering the market. It is unclear how this additional supply of ex-rental properties, disposed of due to increased land tax and interest rates, will affect prestige price floors long-term.
| Suburb | Median House Price | Annual Growth |
|---|---|---|
| Mt Eliza | $1,692,000 | +0.9% |
| St Andrew’s Beach | $1,593,700 | +0.5% |
Frequently asked questions
Should I sell my prestige home via auction or private treaty?
For properties on the Mornington Peninsula priced above $1.5 million, private treaty or Expressions of Interest (EOI) are the dominant methods. Auctions are generally reserved for well-located affordable properties or those between $700,000 and $1.2 million where broad family appeal creates high buyer competition.
How is the short-stay levy affecting property values?
The Short Stay Accommodation Levy, combined with higher land tax and interest rates, is prompting investors to dispose of holiday homes. This has increased the volume of ex-rental properties on the market, particularly in areas like Dromana and Sorrento (Barry Plant Dromana, early 2026).
Is the Mornington Peninsula market still growing?
Mornington is currently in the “Accelerating Growth” phase of the property cycle (HtAG Analytics, March 2026). Neighbouring suburbs Balnarring and Baxter are also in this phase, suggesting a broader Peninsula re-rating with momentum expected to continue over the next 12–18 months.
Why is property supply so limited in Sorrento and Portsea?
Supply is constrained by the region’s unique geography and strict planning laws. The Peninsula is bounded by Port Phillip Bay and Western Port, while significant portions of land are protected under Green Wedge zoning, preventing significant urban expansion and limiting new prestige stock.
Questions to ask your agent
- What percentage of current inquiries for prestige homes are coming from Melbourne weekenders versus permanent retirees?
- How has the Short Stay Accommodation Levy shifted the profile of buyers currently active in the $2 million plus bracket?
- Given the preference for EOI on prestige properties, what is the current average timeline from listing to settlement for homes over $1.5 million?
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.