Get in while you can: 5 suburbs set to gentrify
Caroline Riches, Property Journalist
First published 11 March 2024, 08:00 AM
Alcohol, Bikes and Coffee. That's the ABC of gentrification according to Master of Property at the University of Adelaide Peter Koulizos.
More specifically, this means small bars selling craft beers and Aperol Spritz, vintage bikes with carry baskets on the streets, and cafes selling a range of milk with their coffees. There may even be gin distilleries, or hot yoga studios popping up.
"These things are a sign that younger, wealthier people are moving in," Mr Koulizos said.
"It's a broad social trend that changes a community," explained PropTrack economist Angus Moore.
The key elements required are affordable character or period-style buildings and a location close to a city or water.
"Young city workers love those timber floors, high ceilings, fireplaces and stone fronts and they're on good incomes, often dual incomes," said Koulizos.
"So they buy a home, fix it up or extend it. You multiply that by 100 or 1,000 times and you have a gentrified area."
Riding the wave
Because gentrification tends to occur in more affordable areas, prices can increase quicker than the average for the city or region, explained Mr Moore.
"The area becomes attractive to higher-income households bidding up home prices and rents."
Renovated cottages with veggie gardens are commonplace in North Hobart, which has transformed over recent decades. Picture: realestate.com.au/buy
It can be a slow process – often around three decades, said Mr Koulizos. But the price hikes can be significant.
For example, median prices in the gentrified Adelaide suburb of Torrensville jumped 140% from March 2008 to December 2022, compared to an Adelaide average of 90%.
The historic Brisbane suburb of Woolloongabba experienced a median price hike of 151% in the same period, against a city average of 76%.
While North Hobart saw prices jump by a whopping 207%, compared to a Hobart average of 140%.
To ride a wave from the beginning, you need to tune into early indicators, said Mr Koulizos.
These usually include a decrease in teenagers and children in the area, an increase in couples without children, and more people moving in from elsewhere.
5 suburbs on the move
With the older working class suburbs of Australia's largest cities already gentrified, where's next?
"People will start searching for the next group of homes, which would be those built straight after World War II such as Art Deco homes and 1950s homes," predicted Mr Koulizos.
Or they'll look to our regions.
The annual realestate.com.au Hot 100 list of suburbs expected to outperform has several nominations based on gentrification.
Here are Mr Koulizos' top five gentrifying suburbs to watch this year.
Kilkenny, South Australia
Mr Koulizos predicts this inner northwest suburb of Adelaide will benefit from the drag effect of West Croydon, which has already gentrified.
"People who are priced out of West Croydon look at neighbouring suburbs with similar streetscapes and housing styles like Kilkenny."
With easy access to the city by car and train, the early stages of gentrification are underway in Kilkenny. Picture: realestate.com.au
Agent Peter Kiritsis at Ray White Woodville, who's been selling homes in the area for over 20 years, agrees Kilkenny is on the cusp of gentrification.
"I think we'll see plenty of growth in that pocket. There were a lot of European migrants who settled around Kilkenny in large character homes who are now leaving and the area is getting reborn with young couples and young families.
"The train station, which runs right through Kilkenny, is also a huge asset."
Thebarton, South Australia
This inner-city Adelaide suburb is considered up-and-coming, with cafes and artisan bakeries appearing in former industrial buildings and the 1920s Thebarton Theatre showcasing alternative bands.
A high concentration of character and period style homes add to Thebarton's charm. Picture: realestate.com.au/sold
"The area is transforming," said Mr Koulizos.
"The Coca-Cola factory and the brewery that defined the suburb have sold and the whole area is going to become a mixed-used precinct."
Ettalong Beach, NSW
This pretty suburb on the NSW Central Coast is hugged by sandy beaches, calm waterways and national parks – and is also benefiting from a new influx of Sydneysiders priced out of the city.
Brittney Bushnell, agent at G L Jackson & Co First National Ettalong Beach, said there's plenty of development happening.
Traditionally a retirees haven, Ettalong Beach is now attracting younger families priced out of nearby beach suburbs. Picture: realestate.com.au
"We're seeing younger buyers coming up from Sydney trying to get their foot in the door and younger families loving the sea-change and tree-change.
"Our lifestyle location is probably what has kept our market so steady. We'd love to keep Ettalong our charming, sleepy village but the area is changing dramatically."
Hamilton, NSW
Home to Newcastle's first Italian and Greek immigrants, Hamilton is now a popular dining precinct on the western fringe of the CBD.
"It offers cheaper accommodation and a lifestyle," Mr Koulizos said.
Hamilton's Beaumont St is brimming with cafes, bars and restaurants. Picture: realestate.com.au
Newcastle's industrial past has made the city ripe for gentrification, he added.
"It has the character buildings and now it's also a university town, warehouses are being transformed, and it's welcoming people priced out of Sydney; some people are even commuting from Newcastle to Sydney one or two days per week."
Ballarat East, Victoria
Ballarat East is the oldest urban area in Ballarat and was the site of goldmines and the Eureka Rebellion of 1854, so there's plenty of heritage for people to get excited about.
"For a long time, Ballarat was considered a country town, but now there are universities, it links to Melbourne by train plus the housing remains relatively affordable," said Koulizos.
"A lot of younger people, some who work in Melbourne, some who work in Ballarat, are moving to the area and fixing up older-style houses."
More bang for your buck: Ballarat East is attracting young workers for its affordability and lifestyle. Picture: realestate.com.au/buy
Agent Dominic Morrison at Ballarat Real Estate said Ballarat East is certainly undergoing gentrification and attracting plenty of first-time buyers and investors seeking to capitalise.
"The suburb is full of weatherboards from the 40s and 50s as well as government housing that's getting sold to private buyers.
"The area once had lots of properties that weren't well looked after, but that's changing. Now you look across the fence and it all looks well-maintained, which is really changing the feeling of the suburb."
