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:
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.”
The four signs of gentrification
Mr Koulizos’ research found four key indicators when city suburbs are poised to gentrify:
- A greater decrease than the state average in people aged 18 years and under
- A greater increase than the state average in couples without children
- A greater increase than the state average in people that lived at a different address five years earlier
- 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.