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Victoria’s hot coastal property market: No signs of cooling off

Real estate agents in Victoria’s coastal regions say they have never experienced a winter like it, with demand from Melbourne-based home buyers outstripping supply and many auction campaigns being reduced to just three weeks to keep up with the demand.

Emil Foller, the director of Jellis Craig Sorrento, says the Mornington Peninsula property market, which normally slows over winter as many Victorians holiday overseas or interstate, hasn’t skipped a beat as large numbers of city buyers look to secure a lifestyle home on the coast.

“In a typical winter, I could count on one hand how many transactions there are on a weekly basis. This winter, we have run a consistent schedule of auctions, which two years ago would have been unheard of,” he says.

“Right now, it feels like any other time of the year down here. No one has gone away. No one is holidaying overseas, and most people have stayed in the state, so they’re around and looking to secure that lifestyle property.”

Mr Foller estimates that “about 90 per cent” of buyers currently looking to buy a home on the Mornington Peninsula are from Melbourne.

“Most of our buyers are from Melbourne. We’re getting about 60 or 70 groups through our opens and up to 10 registered bidders at our auctions, “ he says.

He says in the current market, buyers are committing to purchasing a home far more quickly than they used to, and as a result, he is running 20-day campaigns for most of his auctions.

“In any other year, at this time of year, you’d probably find the average days on market would be sitting at around 60 days. At the moment, we are finding that just shy of three weeks is where you reach maximum momentum for a campaign,” he said.

“So, everything we’re listing at the moment is being sold within three weeks. You’re not seeing anything lingering on the market,” he says.

Liz Jensen from Kay & Burton Portsea says demand for coastal properties is so high that some homes don’t even make it to the market.

“I had a house recently, where before we even had a chance to take the photos for the listing, I had someone call up who had missed out on another property. He had a look at it … and it sold before we even had a chance to list it,” she says.

Mr Foller explains that since COVID-19, it has become much more difficult to categorise whether people are buying properties as a holiday home or a permanent residence, as more and more people work remotely.

“The term holiday home is becoming more fluid, and people who live down here are commenting that they have never seen so many lights on in the street,” he explains.

“In many cases, people’s holiday homes are becoming their permanent home, and their Melbourne home is becoming their city base,” he explains.

Ms Jensen says in the lead up to the end of the financial year, the volume of homes that were transacted from Sorrento to Blairgowrie “was like nothing we’ve ever seen before”.

From July 1, the Victorian government increased the stamp duty on properties that sell for more than $2 million by one percentage point – from 5.5 per cent to 6.5 per cent.

Ms Jensen says that as a result, both home owners and vendors were keen to complete transactions on multimillion-dollar homes by June 30.

“I thought things would quieten down after that, but now we’re seeing a whole new market of listings,” she says.

Ms Jensen explains that in recent weeks she has had a rush of listings from families who have owned “modest houses on prime land for in excess of 20 years and up to 50 years who were too embarrassed to list them during the peak, busy season because they’re not glamorous properties.”

“They’re people who decided years ago that it was probably time to sell but because of the emotional attachment had been reluctant to do it and had put it off and now they’re seeing what’s happening down here with prices and they can’t resist,”  she says.

Brett Trebilcock from Belle Property Mornington says COVID-19 had put an end to seasonal property cycles along the Mornington Peninsula and that high demand for beachside homes was now a year-round proposition.

“I think that desire for freedom that the Mornington Peninsula delivers on means that people are looking to buy down here whether its spring, summer, autumn or winter,” he says.

“What that means is that the thirst for properties down this way is outstripping supply and the prices just keep going up and up,” he says.

“It’s the middle of winter, and we’ve still got more buyers than we know what to do with,” he says.

Mr Trebilcock says many buyers who are currently looking along the coast are people from Melbourne who have sold up in the city and are now desperate to find a new lifestyle home near the beach.

“There are a lot of people who are in a precarious position because they’ve sold their home in Melbourne, and they’re telling us that they still haven’t been able to buy anything down here,”  he explains.

Even in the middle of a Victorian winter, he says it is still a seller’s market.

“Normally, we get a home, and we have to go and find the buyers. Now, we have the buyers coming to us, and the challenge is finding enough properties,” he says.

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