Why some homes are selling — and some are sitting

With Clayton Smith

Licensed Estate Agent and Auctioneer - Buxton Mornington Peninsula

A changing market

The Mornington Peninsula property market has changed considerably from the extraordinary conditions experienced through 2020–2022.

Median prices across many of our local townships have eased from their peaks, days on market have increased, and buyers now have something they largely lacked during the boom years: choice.

So why are some properties still attracting strong interest and selling relatively quickly, while seemingly comparable homes can sit on the market for months? The answer, more often than not, comes down to price, presentation and buyer perception of value.

The pressures shaping buyer decisions

There is no question that the market has faced some significant headwinds. Higher interest rates have reduced borrowing capacity and increased holding costs, while Victoria’s land tax environment has made ownership of investment and secondary properties more expensive. Holiday homes are generally subject to land tax (unless an exemption applies), while the expansion of Vacant Residential Land Tax has added another consideration for some owners.

More recently, changes announced in the Federal Budget to negative gearing and Capital Gains Tax have further altered the investment equation for property buyers. While many of these changes are prospective and include grandfathering provisions, they nevertheless affect sentiment around the future cost and benefit of owning investment and lifestyle property.

These factors are particularly relevant on the Mornington Peninsula, where a significant proportion of property has traditionally been purchased as a second home, holiday house or investment rather than as a principal place of residence.

Buyers are still there

But this does not mean there aren't buyers.

There are.

What has changed is their willingness to compromise or overpay.

During the peak of the market, limited stock and intense competition meant buyers often stretched beyond their original budgets. Today, with more choice and less urgency, they are comparing properties carefully and are prepared to wait.

Price, presentation and perceived value

That makes the initial pricing strategy more important than ever.

Properties that are well presented, marketed effectively and positioned at a price buyers recognise as representing ‘fair value’ are still attracting enquiry, inspections and offers. Conversely, properties launched at a price based on what they may have achieved two or three years ago can quickly lose momentum. And once a property accumulates significant days on market, buyers inevitably begin asking: “Why hasn't it sold”?

The lesson for vendors in today's Mornington Peninsula market is relatively simple; you don't necessarily need to be the cheapest property, you need to represent value.

The market will ultimately determine what a home is worth. Getting the price, presentation and marketing strategy right from day one gives sellers the best opportunity to create competition rather than chase the market after it has moved on.

Originally published in the Buxton Mornington Peninsula Magazine. [Read the digital magazine]

Clayton Smith | csmith@buxton.com.au