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These suburbs could be the next big thing

Nick Bendel avatar
Nick Bendel
- 3 min read
These suburbs could be the next big thing

Looking to invest in the next Balmain or Collingwood? A property investment expert has revealed suburbs around Australia that are set to gentrify.

Research by Peter Koulizos, the chairman of Property Investment Professionals of Australia (PIPA), has identified 12 suburbs in four states:

CitySuburbPostcode
SydneyArncliffe2205
SydneySt. Peters2044
SydneyTempe2044
MelbourneBraybrook3019
MelbourneFootscray3011
MelbourneWest Footscray3012
BrisbaneAnnerley4103
BrisbaneLutwyche4030
BrisbaneWoolloongabba4102
AdelaideThebarton5031
AdelaideWest Croydon5008
AdelaideHindmarsh5007

Mr Koulizos said gentrification is continuing in capital cities across the country – the key is to buy in those locations early to make the most of the potential price upswing.

If you had this knowledge a few decades ago, you would have bought in suburbs such as Balmain and Paddington in Sydney before they became highly sought-after and expensive,” he said.

“Likewise, in Melbourne, where you would have invested in Richmond or Collingwood before they became really popular and pricey.

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The four signs of gentrification

Mr Koulizos’ research found four key indicators when city suburbs are poised to gentrify:

  1. A greater decrease than the state average in people aged 18 years and under
  2. A greater increase than the state average in couples without children
  3. A greater increase than the state average in people that lived at a different address five years earlier
  4. A greater increase in the percentage of females working in professional occupations

When an inner suburb experiences an increase in childless couples and a decrease in children, it suggests younger adults are moving to areas that are close to universities and employment hubs, according to Mr Koulizos.

They can’t afford to live in the ritzy eastern suburbs of Sydney, Melbourne or Adelaide, so they target the more affordable and gentrifying inner-western suburbs of these cities,” he said.

Mr Koulizos said another indicator of gentrification is when older long-term residents are replaced by younger new arrivals.

It is often the case that before an area gentrifies it is full of older people who are still living in the houses they bought 50 years ago. As many of them are now on fixed incomes or pensions, they can’t afford to make substantial improvements to their homes, so in move the younger people,” he said.

“Many of them work in professional jobs in the city, on relatively high incomes, no dependants and have a high disposable income and borrowing capacity, so they have the ability to upgrade the period and character homes.

Mr Koulizos said the final sign of gentrification is an increase in the numbers of white-collar women, who have the funds to buy, renovate, upgrade or develop homes in the area.

Disclaimer

This article is over two years old, last updated on June 23, 2018. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent home loans articles.

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This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.

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