More than a third of Sydney and Adelaide suburbs and a quarter in Brisbane are affordable only to the most wealthy, and Hobart and Melbourne are following a similar path, analysis of census data on income and housing costs has found. Almost half of Darwin suburbs are either at risk or already well on the way to being “gentrified”, with a similar figure in Perth.
Researchers at the Australian Urban Observatory, who created a gentrification index from the data, say many of the areas most at risk of being gentrified are relatively recent greenfield areas in what were once outer suburbs, where many lower income families were able to find affordable housing. These families now run the risk of being displaced even farther afield.
“A good example in Victoria is Castlemaine. Twenty years ago it was called the north of north Melbourne, and now the housing costs in Castlemaine have increased exponentially,” says Melanie Davern, the director of the Urban Observatory.
The index, released by AUO on Thursday, attempts to identify areas where lower income households used to be the majority but have since been priced out, as well as areas now dominated by higher income groups, or that soon will be.
Called the PINCH, the new index divides suburbs into one of eight categories. The bottom of the scale are areas where lower or mixed income households were the majority five years ago. As you go further up the scale, the share of lower income households declines, housing prices increase and richer residents dominate.
Not all suburbs in each capital city are included in the index, due to poor data quality and the ABS suppressing some data for privacy reasons.
Dr Alan Both, a research fellow at RMIT University who worked on the index, said the idea was to map the displacement of residents as parts of the city gentrify.
“The people [who] own the properties there are doing quite well, but [gentrification] is causing an adverse effect on the actual health of the city. Because the people that need to live there – to provide the services that make the city – are being priced out.
“You can push them to the outer suburbs, you can push them further out than that. And then eventually you have to basically push them out into their cars, because there’s nowhere else for them to go.”
You can explore gentrification across the Australian capitals by searching the map below.
The data shows that Adelaide, Hobart and Sydney especially are dominated by already gentrified areas. Dr Both suggests the supply and demand of housing is key to explaining this. So are short-term rentals and the migration of people priced out of other cities – especially in Hobart. The data is also based on the census, and data collection in the 2021 census was affected by the pandemic, border closures and lockdowns.
There is a correlation between parts of the city that already have high population density and areas that are already gentrified. Dr Both notes that many of the dense parts of the cities – often the inner cities and established suburbs – are well provisioned with transport, schools and other “social infrastructure”.
Newer and outer suburbs might not be as dense, but social infrastructure is being built out in these areas, and many are being developed. This can lead to displacement.
“They’ll knock down a house that was previously rented to a family and they’ll put four townhouses [there]. And each of those houses cost way more to rent than the house that used to be there was.
“Individually, as a landowner, you know, this, is a good economic decision. But if everybody does that, then the entire area becomes completely priced out for the people that used to live there.”
Dr Both and Davern suggest there needs to be more development that takes into account all of the social and physical aspects of a city that make them livable – including social and affordable housing.
“If we only focus on housing, and we don’t look at all these other combined features that are impacting on this, and the interaction with different people, and the movement of people within place, we’re not going to solve it,” said Davern.
“We’re not building for multiple purposes. We’re not doing build-to-rent. We’ve stopped doing social housing. Community housing is becoming the bearer of social housing now. Building development is very focused on a commercial model of property that produces a profit.
“What about the people who can’t afford it? Where is that greater community need? We need to do it differently.”
