This article is from the Australian Property Journal archive
THE Mornington Peninsula may have reached its peak, as the median house price fell for the first time since December 2018 in the September quarter.
According to the new data from Domain, the Mornington Peninsula has seen its first drop in median price in almost three years, falling by 0.6% after 10 consecutive quarters of increases.
“We’re now seeing softer rates of growth – we’re into negative territory – so, it does show that the market has turned a corner in the Mornington Peninsula,” said Nicola Powell, chief of research and economics at Domain.
The area saw a significant boost after the pandemic ramped buyer preferences for sea changes and lifestyle locations.
Over the June quarter the Peninsula recorded an annual increase of 21.1% reaching what may have been the limit for the market as affordability increasingly declines, locking many out of the market.
“The problem is that demand is still probably there, but as prices go higher, it squeezes out more and more borrowers, and buyers are priced out. So, I think what we’re largely seeing is a natural cooling associated with a worsening in affordability,” said Shane Oliver, chief economist at AMP Capital.
Despite this fall, Oliver is confident that prices won’t continue to fall for long, instead levelling out, as buyers continue to look for locations that enable a better work-life balance.
“The reality is, working from home is here to stay. People have seen the benefit of it. Less time wasted in traffic, fewer office distractions [and] a better lifestyle,” added Oliver.
“So, I think we’ll end up with a new equilibrium, which will see more elevated prices in regional areas within two to three hours of the city.”
Even with this potential slowing, which was observed more broadly across Melbourne in the September quarter with lockdowns across the city, Domain’s House Price Report 10 of the top 20 suburbs for annual growth were on the Peninsula.
