Tide has turned: Beachside suburbs where prices took a $166,000 dip

While home values have sailed higher in many popular coastal hotspots, the tide has turned in other beachside suburbs, potentially saving buyers hundreds of thousands of dollars.

Sea changers wading into pricey pockets on the peripheries of Australia’s two largest cities are set to enjoy the biggest savings, with values in several sought-after seaside suburbs falling by six-figure amounts in the past year, according to the latest PropTrack home price data.

The data, which uses PropTrack’s automated valuation model (AVM) to determine a suburb’s median home value, shows that buyers in many once-frothy coastal housing markets may be able to take advantage of a lull in the market, given typical homes are now cheaper than a year ago.

House prices in beachside suburbs within a few hour’s drive of the capitals surged during the pandemic, when waves of sea changers took advantage of low interest rates and remote working to bid up values of larger homes near the sand and surf.

But with interest rates now much higher and employers summoning staff back to offices, buying conditions have eased in many regions, making coastal homes in some suburbs more affordable.

Most of the beachside suburbs with the biggest house price drops had median prices between $1 million and $2 million, standing in contrast to the top-performing suburbs of the year across Australia, which largely had much more affordable price points.

Victoria dominated the list of coastal suburbs where prices fell most, with the Mornington Peninsula to Melbourne’s south accounting for the greatest proportion.

REA Group senior economist Eleanor Creagh says greater buyer choice in Victoria has been driving weaker price growth. Picture: supplied

REA Group senior economist Eleanor Creagh said high interest rates were a significant hurdle for buyers, and combined with a rise in the number of homes on the market and tax changes, had contributed to softer market conditions and price falls in both Melbourne and regional Victoria.

“Relative to historic averages a lot more properties are listed for sale and accumulated listings are a clear driver of slower price growth in Victoria,” she said. 

“Greater buyer choice has been one factor driving weaker price growth, but higher property taxes have also played a part.”

The median house price in Sorrento on the Mornington Peninsula plunged by $166,000 last year – the largest fall recorded among beachside suburbs around Australia.

Real estate agent and Kay & Burton Portsea director Liz Jensen said wealthy buyers in Sorrento were still keen on multi-million dollar turnkey homes, but demand for properties priced at around the suburb’s median price of $1.97 million had dropped off recently.

This five-bedroom, five-bathroom house on Sorrento's Terry Avenue was sold on 21 January. Picture: realestate.com.au/sold

Buyers with mortgages faced greater affordability challenges than cash buyers purchasing luxury homes, she said.

“The buyers are very selective and they’re holding back not because they don’t want to buy, but because they’re scared they’re going to pay too much,” she said.

“I’d suggest there’s quite good buying at that [more affordable] level.”

The median house value in Somers declined by $133,000, while a typical house in Blairgowrie is now $105,000 cheaper than a year ago.

Across the bay in Barwon Heads, the median house price is $103,000 lower than last year, while in Lorne, about two hours southwest of Melbourne, it fell by $141,000.

Price falls in beachside suburbs weren’t just contained to Victoria, with a few coastal communities in NSW and Tasmania recording home price declines during 2024.

'The hottest coastal suburbs in the 2025 Hot 100': youtube.com/mortgagechoice

A typical house in Austinmer in the northern suburbs of Wollongong is $132,000 cheaper than a year ago, while the median price in nearby Thirroul fell by $48,000.

Two Tasmanian suburbs, Sandford and Margate, recorded declines of $110,000 and $42,000 respectively.

Austinmer real estate agent David Hyslop of Molenaar x McNeice said properties were taking longer to sell, but the decline in median prices likely reflected a change in the type of properties being sold in the suburb.

“It’s always the tale of two towns,” he said. “East of the train line you’re going to pay a premium because you’re close to the beach. But in the last 12 months there’s been a lot more sales west of the train line.

“A lot of residents are getting to the age where they need to downsize, and it’s quite a hilly area so they’re looking to move out of larger two storey homes with accessibility issues.”

He said Austinmer was one of the most sought-after in the Illawarra region, and buyer demand remained strong despite the median price dropping.

Prices across some beachside suburbs in Sydney's iconic Northern Beaches region have taken a fall. Picture: Getty

“The inspection numbers since we’ve come back this year would have increased by 50%,” he said “There’s definitely a lot more energy compared to the end of last year.”

In the unit market, the biggest decline was in Clovelly in Sydney’s eastern suburbs, where a median-priced apartment is now $107,000 cheaper than a year ago.

Unit prices in Mona Vale fell by $51,000 compared to last year, while Newport apartments are a little more affordable than last year after a $18,000 decline.

In Victoria, Ocean Grove and Torquay recorded median unit price drops of $60,000 and $32,000 respectively.

There were declines of between $20,000 and $30,000 in unit prices in several suburbs of the Mornington Peninsula, including Dromana, Safety Beach, Frankston South, Capel Sound and Rosebud.

But a few suburbs closer to the city recorded falls, including Black Rock ($42,000), Hampton ($20,000), Elwood ($20,000) and Williamstown ($19,000).

Unit price falls in beachside suburbs tended to be smaller than for houses, which reflected both the higher price point of houses as well of resilience of the unit market amid affordability challenges.

While both house and unit prices across Melbourne and regional Victoria declined last year, unit prices held up a little better, according to the latest PropTrack Home Price Index.

Search data shows a higher proportion of property seekers have been searching for units on realestate.com.au, suggesting buyers are looking for more affordable options as high interest rates curb borrowing capacities.

Ms Creagh said the affordability of units compared with houses had helped put a floor under unit prices.

“After the strong growth in house prices of recent years, the apartment market offers a relative discount, bolstering buyer demand and pricing,” she said.

This article first appeared on realestate.com.au and has been republished with permission.