All Topics / General Property / Mornington Peninsula – Melbourne

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  • Profile photo of ThamesThames
    Join Date: 2004
    Post Count: 4


    As you may know, the Mornington Peninsula (south of Melbourne) has had great capital growth during the last 15 years. Whilst this has slowed in the last 2 years (typical of most of the east coast), I expect that this area may show strong capital growth over the next 10 years – particularly as the baby boomers, living in the expensive Melbourne inner city suburbs, retire and decide they want to move down the coast. However, from the research I have done, it seems that the yields are very low (2-2.5%) compared to approximately 4-4.5% closer to Melbourne.

    Accordingly, assuming that yields are a useful indicator of value, it would seem that most of the Mornington Peninsula is either over-valued, or, unlikely to experience much more capital growth in the next 2-3 years (I expect it may take 2-3 years for the rental returns to increase from the low base of 2-2.5%). Assuming the above, my feeling is that it may be better to invest in an area like Seaford, Carrum, Chelsea, Bonbeach etc given that these areas have higher yields, are close to the beach (thus appeal to retiring baby boomers etc), and are still within commuting distance of Melbourne city.

    I would be very interested in your views.

    Many thanks


    Profile photo of MortgagemanMortgageman
    Join Date: 2004
    Post Count: 164

    Hi Thames,

    I assume your talking about the western side of the peninsula. The yields are vey low on this side, as there isn’t a huge rental market and property prices are pretty high. However if you have a look on the other side there are some pretty good yields available. I bought a property at the start of the year in Somerville, which is leased at a yield of 6%. This is not uncommon all around the eastern side of the peninsula.

    Kind Regards,

    Cameron Perry
    Perry Financial Strategies
    Level 13, 30 Collins St
    Melbourne VIC 3000
    Ph (03) 9662 1999
    Fax (03) 9662 2044

    Profile photo of ducksterduckster
    Join Date: 2004
    Post Count: 1,674

    The new freeway that is under construction will shake things up in 2008!!

    Profile photo of BonbeachBonbeach
    Join Date: 2004
    Post Count: 214

    I agree, Eastlink is going to change everything from Chelsea to Mornington.

    I have a property in Bonbeach and have just bought one in Seaford. Both 300m from the beach, both have decent houses on them, both on dual occ size blocks. Bonbeach was bought in 2005 for 255k and Seaford in 2006 for 235k.

    These areas HAVE to increase in value when Eastlink is finished. Bonbeach is already showing signs of picking up according to local agents.

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