Looking to find the next up-and-coming suburbs? New data from the Property Investment Professionals of Australia has identified which suburbs will see a makeover in the near future.
The research, according to PIPA chairman Peter Koulizos, identified four demographic factors to determine if an area is in the early stage of gentrification.
The four factors are the following:
With less children and more couples, Mr Koulizos said that this was a significant sign of gentrification, indicating younger people moving to inner suburbs to be near universities and employment hubs.
“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,” the chairman said.
The changing of the guard in a suburb is also an early sign of gentrification, Mr Koulizos said, as an increasing number of “new” residents move in.
Another early sign of gentrification is older people being replaced by younger people.
“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,” the chairman said.
“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.
“Many of them work in professional jobs in the city, on relatively high incomes, no dependents and have a high disposable income and borrowing capacity, so they have the ability to upgrade the period and character homes.”
Independent women with professional jobs, the last point of gentrification, indicates to Mr Koulizos that they would be more likely to have funds to buy, renovate, upgrade or develop property in the area.
“Identifying areas undergoing the early stages of gentrification is just one way that property investors can get above-average returns on their assets,” the chairman said.
“The secret is to get in early before everyone else realises what is going on.”
The capital city suburbs that are showing signs of gentrification, according to the research, are: