Property owners in Melbourne’s east are riding a price wave down the Port Phillip Bay coastline; cashing in soaring capital growth and sailing into the Mornington Peninsula and Geelong with money to spare.
Coastal property markets – once considered desirable only as holiday home destinations – are becoming primary real estate targets for buyers, with prices growing faster along the coast than in greater Melbourne, a report released on Monday shows.
House prices in the Mornington Peninsula jumped 8 per cent annually in the March quarter, while Geelong houses prices rose 7.9 per cent, according to Knight Frank’s Australian Residential Review. Prices in Greater Melbourne grew at 6.8 per cent over the same period.
Mornington agents say up to 60 per cent of their sales are to buyers coming from the east of the city, from developer-attractive areas such as Glen Waverley and Box Hill, who recognise how much further their money goes along the Peninsula.
“Many of the buyers are coming from areas that have had a strong period of growth,” Domain Group chief economist Andrew Wilson said.
“They are cashed up and either downsizing, retiring or looking for that lifestyle.”
Shane Pope of Eview Mornington Peninsula said in the last 18 months the majority of his buyers have come from areas such as Wantirna, Mount Waverley and Doncaster.
“One client sold her home next to a freeway in Doncaster and was not only able to buy [a] similar house here on the beachfront, she kept enough money to completely fund her super forever,” Mr Pope said.
His most recent vendors, Rob Muir and wife Suzie, have lived in Mornington for 12 years and say, increasingly, their neighbours are Melburnians in search of a sea change lifestyle.
“It’s really a magic area,” Mr Muir, a property developer, said. “Mornington has been going ahead since we moved here, it goes up more and more every year.”
The pair have hosted parties with 120 guests on the balcony of their waterfront home, developed by Mr Muir, and say that lifestyle simply wouldn’t be possible to replicate at Melbourne prices.
“If I had the same home in South Yarra, this particular unit would be at least $3.5 million,” he said, “without the view.”
They are now selling their penthouse from $1.75 million, but say they are unsure if they’ll be able to leave the Mornington lifestyle behind.
Andrew Jones, sales manager of Ray White Mornington, said Melbourne buyers often commented on the value for money found on the coast.
“I recently sold a house to buyers looking along the Beaumaris and Parkdale area,” he said. “They said for $500,000, the best they could find in those suburbs was a 1970s two-bedroom unit, but they bought a nice house in Mornington for the same price.”
Agents in Geelong say it is a similar situation, as prices are pushed up by Melbourne buyers.
“The demand is really coming from outside the city,” Michael De Stefano, director of Gartland Real Estate, said.
“That’s true of owner occupiers as well as investors. Melbourne investors in particular see the value for money and their dollar is driving is them.”