Gentrification in Melbourne – suburbs set to transform

Written by realestateview.com.au in Property News on March 19, 2018

Gentrification in Melbourne: The Sun Theatre in Yarraville, Victoria

Long-term Melbourne residents will recall the seismic shift that occurred in St Kilda in the 1990s, when the working class population was given the boot in favour of the up-and-coming hipster class. In the space of a few years, the beachside suburb south of the CBD was transformed from a sleazy hangout where many feared to tread, into some of the hottest real estate in Melbourne. This phenomenon is gentrification – and it’s happening around Melbourne in spades.

Gentrification refers to a shift in the socioeconomic demographic of a suburb, which occurs when residents with more money start to move into the area. It tends to occur in inner-ring suburbs, close to transport links and city jobs, in areas which had traditionally been the stomping grounds of the working poor – think Carlton, Fitzroy and Richmond in the 80s and 90s.

 

The Virginia Penitentiary in Richmond, 1991.

The Virginia Penitentiary in Richmond, 1991, which is now the site of rolling green landscapes.

The old Virginia Penitentiary site in Richmond

Now, renovated terraced houses worth millions are nestled between housing commission high-rises in these once-glum locales, and downtrodden buskers share the footpath with latte-wielding executives in designer suits.

Along with gentrification comes property price growth, and in turn an exodus of lower-income residents who can no longer afford the rising rents the area commands. There’s also a noticeable shift from investor-owned rental properties to first homebuyers and families, as higher prices mean lower rental yields, making the area less desirable to landlords.

Gentrification in Melbourne – where will it hit next?

The inner western suburbs have been the centre of gentrification in Melbourne in recent years, with West Footscray, or WeFo, leading the charge. Urban renewal projects, such as the recent improvements made to Footscray train station, and a boom in the number of high-rise, high-density dwellings approved for construction have all combined to push dwelling values skyward and attract a new class of buyer to the area.

The Fig and Walnut cafe streetfront in Seddon, Melbourne's West

As the gentrification wave sweeps across the inner-west, and families are increasingly priced out of Footscray and Yarraville, Sunshine is the next obvious choice. This suburb has been a multicultural hub since the end of World War II, and since then has been the destination of choice for Maltese and Polish migrants and Vietnamese refugees coming to Melbourne. More recently, African and Burmese arrivals have made it their home.

For families who can’t afford Pascoe Vale or Maribyrnong, there’s Maidstone, set to shake off her bridesmaid suburb reputation in coming years. Just 8 kilometres from the CBD, this blue-collar area has been booming as derelict factories are demolished to make way for slick new townhouse developments. In Maidstone, values were up 16.9 per cent and 21.5 per cent for houses and units respectively to January 2018, according to CoreLogic, while in Sunshine a whopping 36.5 per cent jump in unit values saw the median leap from $380,500 to $519,500.

Journeying north of the once-impenetrable Bell Street hipster boundary, Preston and Reservoir have already begun to evolve from their humble beginnings as elderly European migrants make way for professionals and young families. Thomastown and Lalor are set to be the next big thing in the north, and thanks to the newly-improved South Morang rail line they feel closer to the city than ever before.

In Thomastown, unit prices increased by 19.8 per cent to $413,250 in the year to January, while house prices were up 28.3 per cent to $657,000 Lalor recorded similar growth, with units up 10.7 per cent to $410,000 and houses gaining 25.8 per cent to a median of $636,500.

As we ponder which Melbourne suburb will go from drab to fab next, we should also stop to ask, what is the price of gentrification in Melbourne?

Many demographers say that it’s the enemy of multiculturalism and diversity, paving the way for a homogenous middle-class population devoid of creativity. It can also be a form of socioeconomic cleansing, and as poorer families are forced to move further away from the city, their education and employment opportunities become more restricted, potentially stifling any hope of social mobility. Or, sitting on the other side of the fence, is gentrification really just the ultimate example of upcycling in a world where waste is prevalent?

Interested in doing your own research around gentrification in Melbourne? Check out this article on how to spot a booming suburb.

 

Image source: The Shocko Examiner