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Knockdowns and rebuilds don’t always mean gentrification and rising prices

High numbers of knockdowns and rebuilds don’t necessarily equate to a suburb going through gentrification or that prices are set to rise, according to an expert.

Ray White Group Data Analyst William Clark said every city had a number of areas experiencing some degree of development.

“Sometimes areas with many knockdowns are hit with the gentrification label, and that can be true,” Mr Clark said.

“Some of the suburbs with the most knockdowns can be inferred to be some of the fastest-gentrifying.”

He said large numbers of knockdowns in a suburb does not mean the suburb itself is becoming unaffordable or changing in any meaningful way. 

“More often than not, gentrification is slower and more sustainable than a sudden wave of knockdowns, so whether you are for it or against it, you will see it happening in a time frame you can respond to,” he said.

Across the country, Sydney and Melbourne have the suburbs with the highest level of knockdowns and rebuilds.

Melbourne’s Point Nepean (98) and Balwyn North (88) have the highest number of knockdowns in the country.

For NSW, Ermington – Rydalmere (84) and Concord – Mortlake – Cabarita (79) top the list of most knockdowns.

While in Brisbane, Goodna (35) and Rocklea-Arcacia Ridge (35) have the highest number of knockdown-rebuilds.

Mr Clark said in many of these suburbs, knockdowns featured heavily alongside frequent development on vacant land, leading to higher urbanisation. 

“If these developments are low quality, we will likely see median house prices decrease, as low-quality offerings make up the majority of transactions,” he said.

“The reverse is true if these new developments are high quality.”

According to Mr Clark, there are also higher levels of demolition in regional NSW and Victoria.

With Balgowie – Fairy Meadow (51) and Winona – Bulli – Russell Vale (45) in NSW leading the number of knockdown rebuilds.

While Ocean Grove (44) and Wonthaggi – Inverloch (44) in Victoria also have high development numbers.

“Knockdowns represent a strong step forward in the number of dwellings available, as house lots getting rezoned to apartments and higher density residential often motivates a lot of development,’ Mr Clark said.

“It is interesting to see large levels of redevelopment occurring in the regions when normally you’d expect to see high-development suburbs restricted to outer-city suburbs.”

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Rowan Crosby

Rowan Crosby is a senior journalist at Elite Agent specialising in finance and real estate.