Find a suburb that has a higher than average number of couples without children, with the female in a professional role, and long-term residents, and you may be onto a winner.
New research released by the Property Investment Professionals of Australia (PIPA) looked for similar signs that could help homebuyers and investors pick the next suburbs to gentrify.
“If you had this knowledge a few decades ago, you would have bought in suburbs such as Balmain and Paddington in Sydney before they become hightly sought-after and expensive,” PIPA chairman Peter Koulizos said.
“Likewise, in Melbourne, where you would have invested in Richmond or Collingwood before they became really popular and pricey.”
The research tested 20 different demographic and property factors to determine if any were early indictors of gentrification. It also included data from overseas, which uncovered four demographic factors that helped to identify areas in the early stages of gentrification:
- 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 ago
- A greater increase in the percentage of females working in professional occupations
Mr Koulizos said fewer children in a suburb as well as more couples were early indicators of gentrification as young people moved into inner suburbs close to universities and employment hubs.
The changing of the guard in a suburb was also an early sign of gentrification, Mr Koulizos said, as an increasing number of “new” residents moved in.
“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.
The final early indicator of suburb gentrification was a higher percentage of women working in professional occupations who often didn’t have children, or indeed a partner, but who had the funds to buy and renovate, upgrade or develop homes in the area, Mr Koulizos said. “The secret is to get in early before everyone else realises what is going on.”
Capital city sububrs in early stages of gentrification according to research are:
Melbourne: Braybrook, Footscray, West Footscray
Sydney: Arncliffe, St Peters, Tempe
Brisbane: Annerley, Lutwyche, Woollongabba
Adelaide: Thebarton, West Croydon, Hindmarsh
Central Western Daily, 9 August 2018, Page 22