Australia’s top 20 gentrification hotspots

Changing demographics around Australia are transforming ugly duckling suburbs into swans.

Summary: The key to capitalising on an area’s transformation from ugly duckling to desirable swan is getting in before change is in full swing. This article points out the next gentrification hotspots.

Key take-out: Property investors can capitalise on changing demographics by buying into areas undergoing gentrification.

Key beneficiaries: General investors. Category: Growth.

Some of the most sought-after suburbs have rich histories that can be quickly forgotten with the appearance of trendy cafés, restored homes, upmarket boutiques and cleaned-up streetscapes.

Terry Ryder from hotspotting.com.au says there are countless classic examples of areas that have completely changed from dreary to in-demand, such as Balmain in Sydney, Richmond in Melbourne or Teneriffe in Brisbane.

“Gentrification tends to occur in neglected or previously ignored areas close to a CBD,” Ryder says. “They’ll perhaps have some cheap character housing that’s ripe for renovation, generally affordable prices and the potential for the development of a high street or some element of retail amenity.”

For example, the inner-Brisbane suburb of Bulimba has been transformed over a decade from down-market to one of the city’s trendiest parts, with hefty price tags to match, thanks to the area’s proximity to the city and the water, an abundance of cheap old character Queenslanders on big blocks and a boulevard-style strip crying out to be reborn.

In no particular order, below is a list of 20 diamonds in the rough that are on the verge of transformation.

New South Wales

Enmore

Distance from Sydney: 6 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$769,000

2.8%

-4.5%

$650

4.4%

Units

$494,000

4.5%

4.5%

$350

3.7%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

3,572

1,578

262 (18.1%)

739 (51.1%)

428 (29.6%)

682 (47.2%)

724 (50.1%)

Source: Australian Bureau of Statistics

Despite being so close to Sydney’s CBD, gentrification has mostly bypassed Enmore … until now. The area’s comparably cheaper entry prices, abundance of character housing and popularity with young urbanites are set to inspire change. It’s already popular with artists and other creative types who are keen to be close to local galleries and theatres.

Marrickville

Distance from Sydney: 7 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$752,000

-0.5%

-1.9%

$600

4.1%

Units

$455,000

0.2%

2.2%

$390

4.4%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

24,613

9,908

3,611 (39.3%)

1,819 (19.8%)

3,647 (39.7%)

3,855 (41.9%)

5,017 (54.6%)

Source: Australian Bureau of Statistics

You can already feel an air of change in Marrickville, according to Sam Saggers of Positive Property. Located close to Sydney’s CBD and boasting its own thriving café and bar strip, the suburb has “a buzzing atmosphere”.

In addition to a growing sense of ‘cool’, Marrickville also has good transport infrastructure. A quaint streetscape, proximity to the city and more affordable prices is driving increased demand, he says.

“Semi-detached housing is a good buy, with medians of about $700,000. It makes these properties extremely attractive for homeowners and investors alike.”

Summer Hill

Distance from Sydney: 10 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$851,000

-3.3%

-3.4%

$610

3.7%

Units

$518,000

5.1%

7.1%

$395

3.9%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

6,587

2,895

652 (24.0%)

470 (17.3%)

1,550 (57.1%)

1,304 (48.0%)

1,339 (49.3%)

Source: Australian Bureau of Statistics

When it comes to housing, the suburb of Summer Hill has a bit of everything. In the early part of the 20th century, wealthy settlers built large estates and mansions throughout the area and a few of them still exist today.

Michael Yardney from Metropole Property Strategists says the suburb has a “village feel” with a mix of medium-density apartment blocks and Federation houses. Most of the shops are run by local, independent businesspeople, he says.

Gentrification has begun and will only continue, however the local council has been proactive in its bid to maintain the area’s rich history. Yardney says there are more than 100 properties on the heritage register and lobbying from locals saw the recent announcement of a review.

Maroubra

Distance from Sydney: 11 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$1,051,000

0.0%

0.0%

$730

3.6%

Units

$573,000

-0.3%

2.3%

$525

4.8%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

29,594

11,957

3,619 (32.8%)

2,341 (21.2%)

5,026 (45.6%)

4,514 (41.0%)

6,095 (55.3%)

Source: Australian Bureau of Statistics

The beachside suburb of Maroubra is a favourite surfing spot and Chris Gray from Your Empire believes investors will soon fall in love with it too. Just 11 kilometres from the centre of Sydney, it’s well serviced by public transport and there’s talk of further infrastructure improvements in the future.

There are several good schools in the area and a range of retail facilities, including a bustling shopping centre.

Given its proximity to the water and the city, house prices in Maroubra are already high, however upgrade and development potential means the ceiling is unlikely to have been reached. Compared to other inner-city locations, units offer good value for money.

Blacktown

Distance from Sydney: 42 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$378,000

0.8%

3.6%

$380

5.2%

Units

$285,000

0.0%

2.2%

$350

6.4%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

43,374

15,206

10,196 (70.8%)

2,124 (14.7%)

2,056 (14.3%)

4,967 (34.5%)

8,298 (61.9%)

Source: Australian Bureau of Statistics

Saggers says the whole Blacktown region, which includes the suburb of Blacktown itself, Lethbridge Park, Ropes Crossing and Tregar to name a few, offers some good potential.

“Its population is set to explode to 409,000 by 2026 – a 46% increase,” he says. “It’s emerging as a desirable location for families, particularly as it’s very affordable and sits in a convenient location close to ever-growing amenities.”

There’s a pipeline of significant investment in health, transport and road infrastructure, he says. Newer units close to amenities or older three-bedroom homes with room to add value represent good buys.

Wickham

Distance from Sydney: 157 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$360,000

-5.5%

4.3%

$410

5.9%

Units

$305,000

SNR

SNR

$323

5.5%

Source: Australian Property Monitors. SNR: Statistically Not Reliable

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

952

499

183 (24.6%)

137 (31.9%)

95 (22.1%)

231 (53.7%)

196 (45.6%)

Source: Australian Bureau of Statistics

Saggers thinks Wickham, a suburb of the regional city of Newcastle, is a good bet. There are several factors at play driving gentrification in the area, he says. For one, it’s right on the water.

Wickham is home to the local yacht club and a stone’s throw from the harbour itself. There are several cafés and restaurants on Hannell Street, which runs along the Hunter River.

The drivers of change are supply and demand, plus economics.

Victoria

West Melbourne

Distance from Melbourne: 3 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$671,000

-3.1%

-1.6%

$550

4.2%

Units

$500,000

0.0%

5.8%

$480

4.9%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

3,744

1,499

41 (3.0%)

458 (33.8%)

848 (62.6%)

797 (58.8%)

526 (38.8%)

Source: Australian Bureau of Statistics

Buyers’ agent Paul Osborne from Secret Agent says this inner-city suburb is the last remaining undiscovered gem in Melbourne.

Gentrification is yet to hit its stride but disused warehouses are slowly starting to be converted into hip residential pads. There’s also a prevalence of period-style properties throughout the area.

“Strongly priced inner-city areas normally have strong lifestyle strips – cafés, restaurants, bars and shops. West Melbourne is showing the first signs of this with some funky coffee shops opening.”

Thornbury

Distance from Melbourne: 8 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$649,000

-0.2%

-5.7%

$450

3.6%

Units

$385,000

2.0%

0.0%

$300

4.1%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

17,434

7,822

4,205 (59.1%)

573 (8.1%)

2,255 (31.7%)

2,904 (40.8%)

4,003 (56.3%)

Source: Australian Bureau of Statistics

Property buyers are starting to cotton on to Thornbury’s value for money benefits, Osborne says. Housing stock is a “liquorice all-sorts” arrangement with Victorian, Federation, Edwardian, post-war and modern properties on offer.

“We’d recommend picking up a period home for investment rather than an apartment,” he says.

The neighbouring suburb of Northcote has gone through “massive gentrification” and the ripple effect is starting to be seen in Thornbury. Demographics are changing and the renewal of High Street, which runs through the area, is seeing the emergence of a thriving café culture.

Carrum

Distance from Melbourne: 48 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$440,000

-2.2%

-6.4%

$360

4.2%

Units

$450,000

0.0%

1.1%

$355

4.1%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

3,602

1,737

891 (58.0%)

371 (24.2%)

266 (17.3%)

505 (32.9%)

971 (63.2%)

Source: Australian Bureau of Statistics

The bayside suburb of Carrum is one of those undiscovered gems that investors will soon wonder how they ever missed. Property academic Peter Koulizos says its position, proximity to up-and-coming hubs and cheaper housing will see it become in demand.

“It’ll benefit greatly from development that’s taking place in and around nearby Frankston,” he says. “The revamped boat harbour and redevelopment of the Frankston Waterfront will have flow-on effects.”

It also boasts easy access to the Mornington Peninsula Freeway and Eastlink.

Queensland

Woolloongabba

Distance from Brisbane: 4 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$585,000

4.1%

-6.9%

$420

3.7%

Units

$468,000

2.4%

14.3%

$330

3.6%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

4,789

1,973

987 (54.5%)

75 (4.1%)

744 (41.1%)

1,060 (58.4%)

689 (37.9%)

Source: Australian Bureau of Statistics

Home to the iconic Brisbane Cricket Ground, this inner-city suburb is what Ryder describes as “a bit hodge-podge”.

“There’s a bit of residential, a bit of light industrial, some public facilities like hospitals and the sports ground … it has always been a bit daggy, until now.”

The increasingly popular Logan Road dining precinct, featuring everything from funky cafés to upmarket eateries, has helped to drive change.

“The gentrification of Woolloongabba will be inspired by new apartment developments that’ll drive population growth and attract new demographics,” Ryder says.

Areas located near hospitals and universities tend to experience solid growth thanks to demand from workers and students. Queensland University of Technology’s city campus is close and even the University of Queensland at St Lucia is an easy commute.

Stafford

Distance from Brisbane: 9 kilometres

Median Price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$439,000

-1.8%

-4.2%

$380

4.5%

Units

$408,000

0.0%

7.0%

$340

4.3%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

6,041

2,769

1,960 (77.4%)

136 (5.4%)

437 (17.3%)

1,115 (44.0%)

1,347 (53.2%)

Source: Australian Bureau of Statistics

Located a short drive from the CBD, Stafford is already benefiting from a wave of gentrification in the form of renovations and small developments.

It has been helped along by the recent completion of the Airport Link tunnel, which provides quick access to the airport, northern suburbs, the inner city and even the south side.

Liz Wilcox from Metropole Properties Brisbane says Stafford is one of the few remaining areas close to the city with affordable housing on offer. Cheap post-war properties on good-sized blocks are the best bet, she says.

Generously sized units are also an option although anything too small should be avoided, Wilcox suggests.

“Stafford is starting to show the early signs of gentrification with major renovations and upgrades taking place in the more popular and elevated streets,” Wilcox says.

Margate

Distance from Brisbane: 33 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$339,000

1.2%

-8.4%

$320

4.9%

Units

$304,000

-2.1%

-14.7%

$295

5.0%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

7,008

3,304

2,167 (71.9%)

134 (4.4%)

705 (23.4%)

1,366 (45.4%)

1,540 (51.2%)

Source: Australian Bureau of Statistics

Despite its seaside position and oodles of potential, Margate is still one of the cheapest suburbs in Brisbane to buy a house. Koulizos says it’s on the cusp of change.

“It’s going to benefit from new infrastructure planned for the Redcliffe Peninsula and there’s greater accessibility to that area with the duplication of the Hornibrook Bridge, which provides a link to the Greater Brisbane area.”

A recent wave of development in the form of new homes, townhouses and units shows savvy investors are taking advantage of big blocks and low prices.

South Australia

Torrensville

Distance from Adelaide: 4 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$460,000

0.7%

-13.2%

$355

4.0%

Units

$388,000

-0.6%

-3.4%

$268

3.6%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

3,867

1,710

1,205 (76.1%)

205 (12.9%)

174 (11.0%)

556 (35.1%)

980 (61.9%)

Source: Australian Bureau of Statistics

Just outside Adelaide to the west of the city is the suburb of Torrensville. Ryder says it’s jam-packed full of character and despite a tendency among locals to “rate the eastern suburbs over the west”, it’s becoming more popular.

Proximity to the city, cheaper prices and an abundance of character homes are drawing in younger buyers, he says.

“It’s right on the doorstep of the city but it remains fairly affordable. There are good schools nearby and it’s in close proximity to the airport, although not too close that noise is an issue.

“Henley Beach Road runs right through the suburb. In neighbouring areas, it has become a really excellent high street with shopping, ethnic restaurants, patisseries ... that’s symptomatic of an area becoming gentrified.”

Exeter

Distance from Adelaide: 16 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$365,000

11.4%

-20.7%

$385

5.5%

Units

SNR

SNR

SNR

SNR

SNR

Source: Australian Property Monitors. SNR: Statistically Not Reliable

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

1,097

544

357 (71.4%)

38 (7.6%)

105 (21%)

180 (36.0%)

292 (58.4%)

Source: Australian Bureau of Statistics

Generous planning provisions make Exeter a developer’s dream, Koulizos says. Given it’s less than one kilometre to the beach and boasts boundless opportunity, he expects its fortunes will rise.

“In most parts of the suburb, you only need a minimum 250 square metres for each new allotment and there aren’t any street frontage restrictions,” he explains.

Plus, there’s big potential to add value to one of the many historical homes through a renovation.

“This has already started to occur and will accelerate as interest in neighbouring Newport Quays builds momentum. It’s a redevelopment of an old port and will add value to the suburbs that surround it.”

Port Noarlunga

Distance from Adelaide: 32 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$367,000

0.5%

0.5%

$300

4.2%

Units

$253,000

-0.2%

13.0%

$240

4.9%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

2,632

1,184

856 (79.7%)

116 (10.8%)

98 (9.1%)

306 (28.5%)

717 (66.7%)

Source: Australian Bureau of Statistics

The local council is beginning to make zoning and planning changes that impact Port Noarlunga, meaning development is about to become much more “easy and straightforward”, according to Koulizos.

He says a couple of the existing ‘beach shacks’ have been renovated and proved very popular with buyers, commanding a premium price.

It’s also one of the cheaper beachside suburbs in Adelaide and boasts easy access to the CBD via train. The council has invested significantly in upgrading the area’s foreshore precinct.

Western Australia

Noranda

Distance from Perth: 10 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$525,000

5.2%

10.4%

$430

4.3%

Units

SNR

SNR

SNR

SNR

SNR

Source: Australian Property Monitors. SNR: Statistically Not Reliable

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

8,079

3,036

2,399 (84.2%)

407 (14.3%)

41 (1.4%)

434 (15.2%)

2,336 (82.0%)

Source: Australian Bureau of Statistics

Want more for less? You needn’t look further than Noranda, according to Gavin Hegney from Hegney Property Group. Just a short drive north-east of Perth’s CBD, this inner-city enclave has mostly flown under the radar – until now.

“It’s a 60s-type area where older brick and tile homes with bigger rooms and on larger lots offer good potential for investors,” Hegney says.

Those big blocks offer opportunities for small developers looking to cash in on a seemingly insatiable demand for housing, thanks to the state’s resources boom.

Entry prices are comparably lower than nearby areas and rental returns are decent, he says.

“There’s also a lot of development occurring in the suburbs surrounding it, including Dianella and Morley. That’ll have a benefit.”

Rockingham

Distance from Perth: 50 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$370,000

1.4%

-2.6%

$350

4.9%

Units

$315,000

0.0%

20.3%

$270

4.5%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

14,159

7,226

3,761 (61.3%)

1,120 (18.3%)

1,059 (17.3%)

2,266 (36.9%)

3,627 (59.1%)

Source: Australian Bureau of Statistics

One of the biggest clues of gentrification is proximity to a city, Ryder says, which is why his pick of Rockingham might come as a bit of a surprise. It’s a seaside suburb about 50 kilometres south of Perth and ripe for a new lease on life, he believes.

“It has traditionally been down-market and there’s a bit of heavy industry in the area but there’s development happening and a bit of a café culture developing.

“The Rockingham region is made up of a series of seaside suburbs. The actual suburb of Rockingham itself is undergoing big change.”

The council is undertaking beautification programs and improving the esplanade, he says. “There are some parks and boardwalks – it’s becoming more attractive.”

Midland

Distance from Perth: 17 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$328,000

-1.4%

-3.4%

$340

5.3%

Units

$290,000

0.9%

-10.8%

$340

6.1%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

5,110

2,432

933 (43.6%)

680 (31.8%)

523 (24.5%)

1,200 (56.0%)

856 (40%)

Source: Australian Bureau of Statistics

Seen as a major commercial hub, Midland is a suburb about 15 kilometres north-east of the Perth CBD. It’s “exceptionally well located” and close to arterial roads, the train line and the international airport, Saggers says.

“As property prices in the inner-city precinct soar, people look to outer suburbs such as Midland, for somewhere to live. It’s affordable and has solid infrastructure in place or planned.”

In fact, it’s one of the fastest growing areas in Perth and gentrification is kicking off, especially as a younger demographic moves in.

The government says the region will benefit from redevelopment projects including the Swan District Hospital.

Heathridge

Distance from Perth: 25 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$418,000

1.8%

0.6%

$400

4.9%

Units

SNR

SNR

SNR

SNR

SNR

Source: Australian Property Monitors. SNR: Statistically Not Reliable

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

6,802

2,741

2,424 (95.1%)

121 (4.7%)

3 (0.1%)

610 (23.9%)

1,884 (73.9%)

Source: Australian Bureau of Statistics

Heathridge has a lot going for it, according to Damian Collins from Momentum Wealth. Its cheaper homes on big blocks are ripe for refurbishment and the suburb is close to the beach.

“It’s located directly south of Joondalup, which is deemed to be a Strategic Metro Centre under the state planning scheme. Perth’s urban sprawl means it’s not really considered ‘out of the way’ as much any more. People are beginning to refurbish and add value to properties, which are typically single-storey three or four-bedroom houses built in the 1970s.”

Access to Perth is relatively easy thanks to proximity to the freeway and rail facilities.

The council recently unveiled plans for a rezoned precinct in Heathridge, which would increase density and promote redevelopment.

Northern Territory

Parap

Distance from Darwin: 4 kilometres

Median price

3-month growth

12-month growth

Median weekly rent

Gross rental yield

Houses

$789,000

-1.4%

4.5%

$810

5.3%

Units

$485,000

-6.7%

-1.5%

$430

4.6%

Source: Australian Property Monitors

Total population

Total number of private dwellings

Number of houses

Number of semi-detached

Number of units

Number of renters

Number of owners/

Mortgagees

1,976

811

322 (45.0%)

80 (11.2%)

295 (41.2%)

361 (50.4%)

333 (45.7%)

Source: Australian Bureau of Statistics

The inner-Darwin suburb of Parap is a “stand-out” gentrification hotspot, according to Terry Roth from Herron Todd White. Change is already beginning, and it’s no wonder – it’s close to the highway, down the road from the airport and not far from the bay.

“Old Northern Territory Housing flats have been, and will continue to be, knocked down for newer flats,” Roth says.

The area is also transforming to a bit of an inner-city office precinct, he says. Continued development will drive further demand for housing.

It’s also becoming a bit trendy. The local markets are a long-running local icon and a big draw card.


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