RESIDENTS of a row of townhouses in Skinner Street, Hastings, have put the champagne on ice to celebrate a long-running battle to have part of the complex demolished.

Workers from Budget Demolitions of Bittern erected scaffolding last week and the job was expected to be completed last Friday.

The demolition ends a long battle to remove a partly built three-storey structure at 11 and 12 Skinner Street, which faces the foreshore and marina.

There have been orders issued by Mornington Peninsula Shire, hearings in the Victorian Civil and Administrative Tribunal, a builder deregistered, and much angst from residents, some of whom saw the value of their homes fall by up to $150,000.

The loss of value was so severe Mornington Peninsula Shire granted rate relief to owners who appealed their valuation - a rare occurrence on the peninsula.

The saga started in 1997 when former Bittern real estate agent John Cannon and Flinders resident Walter Cipriani, owner of Cipriani's Flinders Country Inn, joined forces to develop a triangle of land bounded by Skinner and Salmon streets.

Nineteen two-storey townhouses were erected in several stages and sold off, with some fetching as much as $520,000.

The complex was to include an amenities centre, swimming pool, gymnasium and tennis court, but to date only the tennis court has been built.

After many years of on and off again construction, Hastings residents started calling the complex "the building site".

At least two owners sold up and moved away, disappointed with the slow progress of building and stressed over living in a semi-permanent building site with common land littered

with rubble and building waste.

Some townhouses sold for as little as $360,000 at the height of the wrangle, but prices have recovered. One sold for about $400,000 last October and a real estate insider said they were now valued at between $400,000-$500,000.

Cannon and Cipriani lost control of the development and the complex ended up with Banksia Financial Group last year.

Margaret Smart, a resident and secretary of the owners' group, said the townhouses were well-built but residents were disappointed the amenities centre, pool and gymnasium as well as an access gate to Salmon Street had not been constructed. The gate was installed recently.

The order to demolish was based on a number of faults, including a third storey and wing wall constructed without permits, and a concrete slab designed for two storeys only.