Popular suburbs for knocking down and rebuilding along the Mornington Peninsula. 

Whether you’re exploring the possibility of knocking down your existing home and rebuilding, or buying into a new neighbourhood with plans to build new, the Mornington Peninsula offers a huge breadth of opportunity. With its mix of beachside towns, to family-friendly suburbs on the coastal hills, you can create a home and lifestyle in a location that suits your needs perfectly. Notably, the Peninsula is now the second most expensive “regional” market in Australia by land value, so owners are often keen to stay where they are and capitalise on their land by building new. Below are some of the most popular KDR suburbs along the Mornington Peninsula.  

Mornington

Mornington is one of the Peninsula’s most highly-searched locations for knockdown and rebuilds. With its blend of beautiful beaches, bustling cafes, restaurants and bars, and a strong community vibe, it’s no wonder Mornington saw 325 property sales in the past year with a median sale price of $1007737. With its strong lifestyle appeal and easy commute to Melbourne, Mornington is seeing mid-century homes near the beach or Main Street or 1960s classic brick-veneer or fibro cottages replaced with modern and architecturally designed homes that maximise the views of Port Phillip Bay. 

Mornington attracts a mix of young families, professionals and retirees. Mornington is one of the more affluent areas of the Mornington Peninsula, with homes within the “Golden Triangle” area of Mornington, close to Mills Beach and the clifftop esplanade, especially sought-after.

Education is also well catered for, with Padua College and Mornington Secondary College among 13 local schools, plus 14 childcare centres. Residents also enjoy 58 parks, Mills Beach, Fishermans Beach, and strong health services through Peninsula Private Hospital and Frankston Hospital.

Mount Martha and Mount Eliza 

Mount Martha and Mount Eliza are two of the Peninsula’s most prestigious suburbs, well known for their leafy streets and clifftop locations with sweeping views over Port Phillip Bay. With generous blocks, established schools and a strong sense of community, these areas are perfect for a knockdown rebuild project. Over the past five to seven years, many older mid-century homes have been replaced with modern family homes that are sustainable, comfortable and lifestyle friendly. 

Home to 18734 residents, Mount Eliza attracts more affluent residents. Homes in the “Golden Mile” near the clifftop esplanade are especially sought after for new builds, with beach access and favourable soil conditions often making new builds a better option than purchasing an established home. 

In Mount Martha, 312 sales were recorded over the past 12 months, with a median sale price of $1425000. With a population of 19846, the suburb attracts families and professionals looking specifically for bay views and a more relaxed lifestyle. Elevated sites along the Esplanade and hillside pockets are particularly popular for knockdown rebuilds, noting that block sizes are usually between 700 - 1000sqm.  

Education is a major drawcard across both suburbs with Toorak College, Balcombe Grammar School and Padua College closeby. Residents also enjoy a huge array of reserves and stunning beaches such as Canadian Bay and South Beach, making these suburbs highly desirable. 

Dromana and Safety Beach

Dromana and Safety Beach are two of the Mornington Peninsula’s fastest-changing suburbs, where older houses and 1970-1980s dwellings are steadily being replaced with modern family homes. Both suburbs sit on flat, subdivisible blocks, making them ideal for knockdown rebuild projects. Their appeal comes from the strong coastal lifestyle on offer for both young families and retirees alike including beautiful beaches, busy marinas, foreshore parks and a vibrant cafe culture. 

In Dromana, 163 properties were sold in the past year, with a median sale price of $950000. With a population of 6626, the suburb attracts families and investors alike, supported by 3 local schools and 3 childcare centres - which are also on the rise. Its lively beachside shopping strip, playgrounds close by and easy freeway access and quick commute into Melbourne add to its desirability.

Safety Beach is home to 6328 residents, many of whom are drawn to the marina precinct and foreshore reserves. With 23 parks and strong connections to surrounding townships, Safety Beach is popular for those wanting a contemporary coastal lifestyle in a community that continues to grow. In Safety Beach, 96 property sales were recorded in the past year, with a median price of $1162500 - ensuring this suburb is set to boom even further over the coming years.

Together, Dromana and Safety Beach are key hotspots for knockdown rebuilds on the Mornington Peninsula, offering the chance to create a brand-new Carlisle home in a location where the sea, shops and schools are all within easy reach.

Rosebud to Rye Coastal Precinct

The Rosebud to Rye Coastal Precinct includes some of the fastest-changing suburbs on the Peninsula, where the knockdown rebuild trend has been accelerating since 2018. Once known for their fibro beach shacks and modest seaside cottages, these suburbs - including McCrae, Capel Sound, Tootgarook, Rye and Rosebud - are are now undergoing significant renewal, with both developers and owner-occupiers leading the charge in the knockdown rebuild market. While small-scale developments, such as dual occupancies and townhouses, are becoming common, families and retirees are also replacing older homes with stunning new designs optimised for both comfort and longevity. Areas within walking distance to the foreshore are especially popular, as demand for modern housing in these affordable coastal locations grows.

McCrae

McCrae sits at the foothills of the winding roads of Arthurs Seat, and is one of the most picturesque parts of the Southern Peninsula. Known for its relaxed holiday atmosphere, the suburb is experiencing steady transformation as older homes are replaced with new builds and modern designs that capture bay views. With a small population of 3311, McCrae households record a median rental return of $690. With the narrow strip of land between the freeway and the foreshore, finding a suitable block for knockdown and rebuild can be challenging, especially with demand for knockdown rebuild projects remaining strong. Supported by 8 parks, McCrae continues to attract those seeking both convenience and coastal living along the Mornington Peninsula. 

Capel Sound

Capel Sound has seen accelerated gentrification over the past decade, with many older homes giving way to modern and sustainable new properties. The suburb’s population of 5246 reflects a mix of retirees and younger households seeking affordability and access to the foreshore. Once known as a quieter, affordable pocket of the Peninsula, the suburb’s demographics are now changing with the rise and popularity of knocking down an existing property and rebuilding. The area provides close proximity to infrastructure and schooling options along the Southern stretch, providing a relaxed lifestyle by the bay. 

Tootgarook 

Tootgarook is one of the more understated suburbs along this stretch of the Peninsula, positioned between Rye and Capel Sound. Long characterised by more affordable housing options and a quieter seaside atmosphere, the suburb is now seeing a shift in demographic as younger households move in and redevelopment gathers pace. With a population of 3178, Tootgarook offers local reserves and foreshore amenities, providing the perfect backdrop to build a contemporary new sustainable home that will see new families and downsizers enjoy their new coastal lifestyle. 

Blairgowrie (Coming Soon)

Blairgowrie sits comfortably between Rye and Sorrento, offering easy access to both the popular Port Phillip Bay and the coastal back beaches. Known for its leafy streets, sense of privacy and a strong mix of both holiday homes and permanent residences, Blairgowrie is growing in popularity for those seeking a relaxed lifestyle by the sea. Although not currently in our build area, we are exploring the possibility of future knockdown rebuild expansion opportunities. 

Rye

Rye is one of the Peninsula’s best-known lifestyle destinations, with its easy and wide foreshore, safe swimming beaches, 16 reserves and a strong sense of community. With a population of 9438, and a median rental return of $590, Rye reflects a mix of owner-occupiers and renters. The suburb offers 3 schools, and childcare centres and diverse local services. In recent years, KDR has become increasingly popular, as families and retirees look to replace ageing beach houses with modern, low-maintenance homes that can make the most of the coastal setting and nearby amenities. 

Rosebud

Rosebud is one of the southern Peninsula’s most practical and family-oriented suburbs, offering flat blocks that make knockdown rebuilds both straightforward and attractive. With a population of 14381, Rosebud is well-serviced by 11 schools - including Rosebud Primary School, Eastbourne Primary School, Rosebud Secondary College and the Padua College Rosebud campus - and supported by 7 childcare centres. This makes it one of the better-served education hubs on the southern Peninsula. Rosebud also functions as a key retail and medical hub. The large Rosebud Plaza anchors the shopping precinct with Coles, Woolworths, Aldi, Kmart and Big W, complemented by specialty stores and cafés along Point Nepean Road. Medical facilities are equally strong, with Rosebud Hospital providing emergency and specialist care, alongside multiple local GP clinics and allied health providers - making this area appealing to both young families and retirees alike, and the perfect place to build a new family home. 

Together, this precinct along the southern Mornington Peninsula is being transformed from sleepy seaside towns into vibrant coastal communities. For anyone considering a knockdown rebuild, these suburbs represent an opportunity to secure a brand-new Carlisle home in areas where modernisation and lifestyle demand are clearly on the rise.

Hastings and Bittern

Located on the western side of the Peninsula, Hastings and Bittern are popular choices for families seeking a quieter lifestyle. Both suburbs offer larger blocks and more affordable prices compared to the bayside suburbs of Port Phillip Bay, making them attractive for knockdown rebuild projects. Modest brick homes and many older cottages are being replaced with contemporary family dwellings that prioritise room for growing families and big backyards. 

In Hastings, with a population of 10369 spread across 26497227 square metres, residents enjoy a balanced lifestyle supported by 9 schools, 7 childcare centres and 23 parks and reserves. The suburb also benefits from its proximity to Western Port and HMAS Cerberus, providing stable employment and strong community ties.

In Bittern, the community of 4276 is characterised by larger allotments and a more relaxed township feel. Families are drawn to the open spaces and convenient V/Line train services, while investors are attracted by a median asking rent of $615, highlighting rental demand. With 1 schools nearby and 17 reserves, Bittern combines affordability with access to education and lifestyle amenities.

Together, Hastings and Bittern give homeowners the chance to create a brand-new Carlisle home in established, family-friendly communities where affordability and lifestyle work hand in hand.

Sorrento (Coming Soon) 

Sorrento is one of the most prestigious addresses on the Mornington Peninsula. Known for its historic limestone architecture, vibrant shopping precinct and iconic beaches, its blend of charm and luxury appeal continues to attract strong buyer demand. With a population of 2013, Sorrento is popular with those seeking holiday homes or a grand family residence. While we don’t currently build here, we are currently exploring the possibility of  future knockdown rebuild expansion.  

Visit our Bankside display homes in Rowville just 40 minutes from the Mornington Peninsula, to discover some of our most popular homes for knocking down and rebuilding.