The coastal area southeast of Melbourne is providing a permanent escape as the pandemic endures.
5 min
It’s been anything but business as usual for the Mornington Peninsula, one of Australia’s blue-chip coastal regions, an hour southeast of Melbourne.
Against the backdrop of the global pandemic, rising unemployment, strict social distancing and economic fears, the prestige coastal community has offered homeowners a refuge and demand has seen it rise to become one of the country’s best performing areas.
Once the domain of wealthy second-home owners who decamped to their holiday properties over summer, it’s become a permanent hotspot with buyers across all price brackets trying to get a foothold in the area for the best part of six months.
Offering an appealing mix of diverse housing and an aspirational coastal lifestyle, the Mornington Peninsula is a comfortable commute to Melbourne’s Central Business District and has immediate access to restaurants, cafes, wineries and recreational activities.
Peninsula Sotheby’s International Realty managing director Robert Curtain described 2020 as being “a very different real estate market.”
“Every month since March 2020 has been a record month for us in terms of total sales value and volume,” he said.
There was no let-up in interest over Christmas and New Year’s holidays after a busier than expected trading period in the winter reduced stock levels ahead of summer.
Among several notable transactions in December, was the $5.5 million (US$4.26 million) sale of a two-bedroom house on 461 square meters of beachfront land on Mentor Road on Blanarring Beach and a home on Bowen Road in Sorrento that sold for more than A$4.5 million within 24 hours of hitting the market.
An architect-designed house on MacGregor Avenue in Portsea, which has a price guide of A$6.8 million to A$7.3 million, is typical of what discerning buyers are looking for in a luxury Peninsula property Mr. Curtain said.
Designed by Guildford Bell with five bedrooms and five bathrooms, it occupies a private 3,000-square-meter block in easy walking distance of the beach.
“High buyer demand and a lack of stock creates competition and ultimately strong sales results. This year we have seen very quick and sharp increases in property prices never seen before,” Mr Curtain said of the activity.
“The majority of buyers are either upgrading existing homes or making a longer-term commitment to buying on the peninsula. Without question the restrictions on travel has changed lifestyle options for many buyers,” he said.
Australia implemented international and national border control measures and physical distancing rules to reduce the spread of Covid-19 from March 2020.
Movement restrictions and social distancing requirements resulted in a ban on all in-person property inspections and auctions across the country.
Although Australia flattened the curve and lockdown restrictions eased in late May, a cluster of cases led to a second wave of infections in Victoria. A “state of disaster” was declared and Victoria faced severe restrictions including a nightly curfew, mandatory face coverings in public and the closure of schools and businesses between August and October. The Victorian Department for Health and Human Services reports more than four million Victorians have been tested for the virus since March with the state recording several days of zero new cases in early January.
Kay & Burton Portsea managing director Liz Jensen, who has sold property on the Mornington Peninsula for 35 years, said she was shocked at the demand that followed the lift in restrictions in October.
She said while the area was usually always busy in spring, she estimated inquiry levels increased three-fold once Victorians were allowed to move freely around their state again.
Big-Ticket Sales
The momentum of spring on the Mornington Peninsula has carried through to summer according to agents. More than 32,000 people have taken a shine to a listing for a home on Wild Coast Road in Portsea, making it one of Australia’s most viewed properties in January, according to online sales portal, realestate.com.au.
Several groups have conducted private inspections since it was listed the week prior to Christmas and an offer is imminent, said Ms Jensen, who is the listing agent for the property.
With a price guide of $8.8 million to $9.75 million, the eight-bedroom luxury home is embedded among the sand dunes and is not your “usual beach house,” Ms Jensen said.
Its indulgent resort-like feel has been designed to cater for large family gatherings or to be shared with groups of friends.
“There’s not much in these areas, it’s a thin market, so there’s always a level of buyers for properties of this calibre,” she said.
“Buyers are accelerating their plans, they’re not old enough to retire, but they’re choosing homes down here to live in permanently. We have people buying everything in every price bracket from $1.5 million to $10 million and everything in between.”
Buyers, she said, are looking with intention and showing a new appreciation for the established area.
“Over the last Covid year and going into this one, I find people to be very clear in their mind that they want to live a certain lifestyle that is more relaxing and less stressful,” she said.
“They want to enjoy themselves more and be able to share that with their family and friends. That works well down here,” she added.
A Strong Outlook for 2021
The trend hasn’t been lost on REA chief economist Nerida Conisbee, who picked the Mornington Peninsula as one of her top 2021 regional performers, based on its stellar results in 2020.
“Mainly because the region has seen the biggest jump in views per listing in Australia this year,” she said.
“The most popular suburb with house hunters is Blairgowrie where views per listing have more than doubled in 2020. It suggests buyer demand is accelerating while prices in Portsea jumped 20% last year to hit almost $2.4 million.”
However, Ms Conisbee expects Australia’s best-performing regional areas to be those that are closest to a capital city as movement returns and restrictions ease.
Regional Australia
The Australian Government’s $257 billion in direct economic stimulus to cushion the blow of the pandemic and the country’s record-low interest rate have helped support the property market but it’s the explosion of people shifting from capital cities that has had a dramatic impact on regional markets.
The spike in city-dwellers fleeing urban environments for a coast or country lifestyle meant regional house prices grew faster than metropolitan values for the first time in nearly 15 years.
Regional property values jumped 6.9% in the 12 months to December 2020 more than three times the 2% figures of the combined capital cities, CoreLogic revealed last week.
CoreLogic’s Asia Pacific Head of Research Tim Lawless said it was the first time during a rising market where regional markets had outpaced capital cities. Traditionally, regional areas outperformed capital cities during downturns.
“As remote working opportunities became more prevalent and demand for lifestyle properties and lower density housing options became more popular, regional areas of Australia saw housing market conditions surge,” Mr Lawless said.
It’s a movement not lost on the Mornington Peninsula, which appears to have its short-term future all but assured with January set to be another record month, according to Mr Curtain at Sotheby’s.
“The forecast for 2021, especially the first half, is likely to stay very strong as a lack of stock with more people using their homes than ever continues and cheap money provides further confidence for buyers,” he said. “But it’s a crazy world, so I’ll leave predicting the latter half of the year to those with a crystal ball.”
Copyright 2020, Dow Jones & Company, Inc. All Rights Reserved Worldwide. LEARN MORE
Hoping to recreate a freewheeling world tour from their youth, two retirees set themselves a ‘no itinerary’ challenge: Can they improvise their way across seven countries?
PSB Academy currently hosts over 20,000 students each year and offers certification, diploma and degree courses.
Unmarried home buyers say they are giving priority to a financial foundation over a legal one
4 min
The big wedding can wait. Couples are deciding they would rather take the plunge into homeownership.
In reshuffling the traditional order of adult milestones, some couples may decide not to marry at all, while others say they are willing to delay a wedding. Buying a home is as much, if not more of a commitment, they reason. It helps them build financial stability when the housing market is historically unaffordable.
In 2023, about 555,000 unmarried couples said that they had bought their home in the previous year, according to a Wall Street Journal analysis of Census Bureau data. That is up 46% from 10 years earlier, when just under 381,000 couples did the same.
Unmarried couples amounted to more than 11% of all U.S. home sales. The percentage has climbed steadily over the past two decades—a period in which marriage rates have fallen. These couples make up triple the share of the housing market that they did in the mid-1980s, according to the National Association of Realtors.
To make it work, couples must look past the significant risk that the relationship could blow up, or something could happen to one partner. Without a marriage certificate, living situations and finances are more likely to fall into limbo, attorneys say.
Mark White, 59 years old, and Sheila Davidson, 62, bought a lakeside townhouse together in Newport News, Va., in 2021. But only her name is on the deed. He sometimes worries about what would happen to the house if something happened to her. They have told their children that he should inherit the property, but don’t have formal documentation.
“We need to get him on the deed at some point,” Davidson said.
White and Davidson both had previous marriages, and decided they don’t want to do it again. They also believe tying the knot would affect their retirement benefits and tax brackets.
Couples that forgo or postpone marriage say they are giving priority to a financial foundation over a legal one. The median homeowner had nearly $400,000 in wealth in 2022, compared with roughly $10,000 for renters, according to the Federal Reserve’s Survey of Consumer Finances.
Even couples that get married first are often focused on the house. Many engaged couples ask for down-payment help in lieu of traditional wedding gifts.
“A mortgage feels like a more concrete step toward their future together than a wedding,” said Emily Luk, co-founder of Plenty, a financial website for couples.
Elise Dixon and Nick Blue, both 29, watched last year as the Fed lifted rates, ostensibly pushing up the monthly costs on a mortgage. The couple, together for four years, decided to use $80,000 of their combined savings, including an unexpected inheritance she received from her grandfather, to buy a split-level condo in Washington, D.C.
“Buying a house is actually a bigger commitment than an engagement,” Dixon said.
They did that, too, getting engaged eight months after their April 2023 closing date. They are planning a small ceremony on the Maryland waterfront next year with around 75 guests, which they expect to cost less than they spent on the home’s down payment and closing costs.
The ages at which people buy homes and enter marriages have both been trending upward. The median age of first marriage for men is 30.2, and for women, 28.6, according to the Census Bureau. That is up from 29.3 and 27.0 a decade earlier. The National Association of Realtors reported this year that the median age of first-time buyers was 38, up from 31 in 2014.
Family lawyers—and parents—sometimes suggest protections in case the unmarried couple breaks up. A prenup-like cohabitation agreement spells out who keeps the house, and how to divide the financial obligations. Without the divorce process, a split can be even messier, legal advisers say.
Family law attorneys say more unmarried people are calling for legal advice, but often balk at planning for a potential split, along with the cost of drawing up such agreements, which can range from $1,000 to $3,000, according to attorney-matching service Legal Match.
Dixon, the Washington condo buyer, said she brushed off her mother’s suggestion that she draft an agreement with Blue detailing how much she invested, figuring that their mutual trust and equal contributions made it unnecessary. (They are planning to get a prenup when they wed, she said.)
There are a lot of questions couples don’t often think about, such as whether one owner has the option to buy the other out, and how quickly they need to identify a real-estate agent if they decide to sell, said Ryan Malet, a real-estate lawyer in the D.C. region.
The legal risks often don’t deter young home buyers.
Peyton Kolb, 26, and her fiancé figured that a 150-person wedding would cost $200,000 or more. Instead, they bought a three-bedroom near Tampa with a down payment of less than $50,000.
“We could spend it all on one day, or we could invest in something that would build equity and give us space to grow,” said Kolb, who works in new-home sales.
Owning a place where guests could sleep in an extra bedroom, instead of on the couch in their old rental, “really solidified us starting our lives together,” Kolb said. Their wedding is set for next May.
Homes and weddings have both gotten more expensive, but there are signs that home prices are rising faster. From 2019 to 2023, the median sales price for existing single-family homes rose by 44%, according to the National Association of Realtors. The average cost of a wedding increased 25% over that time, according to annual survey data from The Knot.
Roughly three quarters of couples move in together before marriage, and may already be considering the trade-offs between buying and renting. The cost of both has risen sharply over the past few years, but rent rises regularly while buying with a fixed-rate mortgage caps at least some of the costs.
An $800 rent hike prompted Sonali Prabhu and Ryan Willis, both 27, to look at buying. They were already paying $3,200 in monthly rent on their two-bedroom Austin, Texas, apartment, and felt they had outgrown it while working from home.
In October, they closed on a $425,000 three-bed, three-bath house. Their mortgage payment is $200 more than their rent would have been, but they have more space. They split the down payment and she paid about $50,000 for some renovations.
Her dad’s one request was that the house face east for good fortune, she said. Both parents are eagerly awaiting an engagement.
“We’re very solid right now,” said Prabhu, who plans to get married in 2026. “The marriage will come when it comes.”
