Victoria’s regional luxury markets have felt the impact of rising land tax, leading to a recalibration across the Mornington Peninsula property landscape.
Licensed Estate Agent
Ruth Williams of Kay & Burton Flinders and Red Hill, noted a clear shift in market dynamics, with activity easing compared to the COVID-19 surge.
“The Peninsula experienced extraordinary price growth during the pandemic, so the correction has been more pronounced than in other areas. The sharp increase in land tax in 2024 has also created a significant barrier for buyers considering a second property,” she said.
“However, on a positive note for 2025, many of the holiday homeowners we talk to have reported their most recent land tax notices have shown a decrease in charges, reflective of re-valuation of property to the current market.”
With the first interest rate cut now in place and the possibility of further reductions this year, renewed momentum is expected.
“We anticipate more buyers re-entering the market as conditions improve. If buyers wait too long, they risk missing this window of opportunity. As we know, once competition returns, prices will follow,” Ms Williams said.
While demand for holiday homes has eased, interest in permanent residences has strengthened. Liz Jensen, Director of Kay & Burton Portsea and Sorrento, observed that the Peninsula experienced a “recession” in 2024, but recent signs point to a shift in confidence.
“In the last quarter, we saw new buyers entering the Portsea, Sorrento, and Blairgowrie markets, motivated to secure a family home for the future while they are in a strong income phase,” she explained.
As a result, multigenerational holiday homes within easy reach of Melbourne are attracting fresh interest.
“Time-poor buyers are prioritising turnkey properties that require little to no work so they can enjoy them immediately. This creates opportunities for others to capitalise on properties requiring minor updates or full renovations—whether for personal use, holiday rental, or resale at a profit,” Ms Jensen said. “The market today is vastly different from this time last year. The overall sentiment is much more optimistic, with buyers focusing on long-term financial security and the fundamentals of wealth building.”
On the southern end of the Peninsula—encompassing Portsea, Sorrento, Blairgowrie, and Rye—Kay & Burton secured the highest number of sales in the $2 million to $5 million range, achieving 18 per cent market share in 2024*. While in the Red Hill and Flinders region, Kay & Burton led the market with a 32 per cent share in the same price bracket, outperforming all competitors*.
With renewed buyer confidence and strong fundamentals in place, the Peninsula remains a compelling market—offering prime opportunities for those looking to secure their future in one of Victoria’s most sought-after coastal regions.
*Data sourced from realestate.com.au sold listings and Kay & Burton CRM
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