The gentrification of suburbs in Australia’s major cities has grown in leaps and bounds in recent decades.
Low-income industrial suburbs transformed into higher-income areas with higher-income households. This change cemented the feel and character of these neighbourhoods. It resulted in a significant increase in local property values, mainly because the demand for these properties and the ability to pay for them came from people with the required disposable income.
Take Melbourne, for example. Over time, former slum suburbs like Fitzroy, Richmond, Carlton, and Abbotsford have significantly changed the feel of the city by transforming into trendy and desirable neighbourhoods in line with the Melbourne’s 2030 plan.
So, how did gentrification come about, and how can you identify such suburbs to take advantage of the growth? We take a more in-depth look in this article.
How Did Gentrification in Australia’s Suburbs Begin to Occur?
The march towards gentrification began when manufacturing industries began to leave the suburbs because of better roads and cheaper transport. At the same time, workers with more disposable incomes chose to live in better housing out of the city.
With their rise to the middle class, they wanted the lifestyles to match with spacious semi-detached or detached houses with plenty of room for the children to play. The need to live in the CBD decreased with these prime areas left for offices, higher education campuses, financial services headquarters, retail complexes, and government offices.
Additionally, the rise of retail and service-based jobs, smaller household sizes, the move towards more women in the workforce, and an increase in the cost of living, made properties near the city more attractive to a larger pool of potential buyers.
The Property Investments Professionals of Australia (PIPA) Report, authored by Peter Koulizos in 2018, demonstrated this gentrification trend. It went on to identify the central suburbs in Australia’s leading cities, which were ripe for gentrification.
For instance, the suburbs of St Peters, Arncliffe, and Tempe in Sydney were identified in the report, whereas in Melbourne, the suburbs of Footscray, Braybrook, and West Footscray featured. In Adelaide West Croydon, Thebarton, and Hindmarsh were mentioned, while in Brisbane, the suburbs of Annerley, Woolloongabba, and Lutwyche stood out as the next to undergo gentrification.
Identifying Gentrification in Australia’s Up-and-Coming Suburbs
A higher-income demographic drives out lower-income residents and contributes towards the gentrification of a suburb. These more affluent residents possess higher income, which drives the need for higher property values, coupled with increased infrastructure and social amenities provision.
And with more women joining the workforce, two incomes in a household put more disposable income into a family’s pocket and upped their spending power.
So, should you notice an increase in property prices, know that the process of gentrification is likely to begin within that area if it hasn’t already. With growing incomes, comes the ability to afford and pay for higher-value properties.
Also, top-end cafes, higher-end stores in sophisticated retail complexes, social and sports amenities, better schools and colleges, as well as better transport and infrastructure all work to satisfy the demand for better living conditions from residents earning more money.
However, some suburbs may not improve, even if they meet all the factors to improve. There might be underlying factors that block gentrification such as crime, drugs, too much industry in the area, or an oversupply of public housing inhabited by low-income residents.
The secret to identifying gentrification lies in detailed research of possible suburbs in which several economic and social factors are changing concurrently.
These factors include proximity to a more expensive neighbourhood, proximity to the CBD or the waterfront, and any sponsored beautification programs. The construction of desirable amenities such as a quality school, an attractive shopping centre, and efficient public transport are other indicators. You could also take note of any beautiful period houses or listed buildings that are already present in the area and ripe for renovation into housing or office space.
In terms of demographics, look out for several factors that point towards the gentrification of a suburb. Some of these include
- An increase in couples without children within an area
- A decrease in people aged 18 years and under
- An increase in the number of professional working women
- An increase in people that lived at a different address five years ago
How to Invest in Upwardly Mobile Suburbs and Stay Ahead of the Game
Are you looking to invest in property or buy your next home?
Australian property markets are improving, but you must take into account the future to ensure that your investment goes up and not down. According to Peter Koulizos of PIPA, “the secret is to get in early before everyone else realises what is going on.” This strategy involves paying attention to all the factors discussed above and leveraging the advice of specialists to make better purchasing decisions.