The richest hipster in Coburg (what a savvy barista taught me about finding the next hot suburb)
Author: Tom Haigh
10 years’ ago, my wife Nikki and I purchased our first property – a largely untouched post WW2 clinker brick home in the culturally diverse Victorian suburb of Coburg, situated roughly 9km North of the Melbourne CBD. Better known for its kerbside kebab stands, hotted up Nissan Skylines, and Turkish coffee than for its natural beauty, at the time Coburg felt like Mars – especially for someone who had spent most of their life living close to the beach.
Whether I truly believed it or not, I convinced myself that we had made the right decision; that Coburg was a foothold in the market and a stepping stone on the path to where we truly wanted to end up. It didn’t help that despite their support and well-wishes, you could tell that our family and friends thought we were crazy! (well most of them anyhow…)
There was something that I would discover however that most others looked past – change was-a-happening.
Before taking the leap of faith, we’d been able to get to know Coburg during regular visits to see Nikki’s brother and sister-in-law who had purchased their own slice of ‘the burg’ some 12 months prior. As we came to be more familiar with the local streets, I started to notice some of the things I’d learnt about when educating myself on how to successfully invest in property.
Having spent countless hours distilling the advice contained within the many books, CD’s and newspaper articles I’d consumed on the subject, it was clear that there were some consistent drivers of property price growth, drivers that did not discriminate based on postcode or the perception of the general public. And whilst most of my self-education to date had been focused around analysing facts and figures, it would be more ‘gut feeling’ than anything else that would see my confidence soar.
One Saturday morning we’d stopped by the local coffee shop to caffeinate amid a long list of open-home inspections. To my surprise the local coffee shop looked like something you’d expect to find in the trendy inner-city suburbs of Fitzroy, Richmond and South Melbourne. Sporting a tan coloured apron, checked shirt with the top button fastened and a beard that would make Grizzly Adams jealous, the café owner greeted us like long lost pals.
As we got chatting, our new 40-something hipster friend shared something I’ll never forget. When asked about his inspiration for opening a café in Coburg he immediately replied, “it’s all coming this way”. “What’s all coming this way?” I asked, puzzled by his response. After pausing for a moment to empty used coffee grounds into a hessian sack he began “The money. The inner ‘burbs are already too expensive for anyone not earning $200k a year, the lack of affordability is pushing young families out this way. My business thrives on those families – they want lattes, baby chinos and $17 smashed avo – and trust me they’re happy to pay good money for them.”
He was talking about a phenomenon known in real estate circles as ‘the ripple effect’. An effect that begins when buyers will no longer tolerate the price indifference between one expensive suburb and the neighbouring more affordable suburbs. As buyers begin searching for greater bang for their buck, what starts as a trickle soon turns into a torrent. Word starts to get out about the next ‘hot’ suburb, buyers turn up to open homes and auctions in droves, and before long the frenzy of activity sends prices skyrocketing.
Thankfully for us, and for the bearded café owner, this is exactly what played out in Coburg. Young families and DINKS (Double Income No Kids) like us began to filter in, buying up the older, tired clinker brick homes, and breathing new life into them through modern renovations and extensions. Couple this with the addition of other cafes, bars, craft breweries, and bakeries serving $10 sourdough, and before you know it, the long-held stigmas begin to fade away.
By 2015, the year we sold up to move north to Newcastle, Coburg had undergone enormous change, so too had property prices. In many instances the value of homes had increased by 70% from the 5 years prior.
My experience at Coburg taught me many things – to be more open minded, to not judge a book by its cover, but most of all to look for signs of positive change. Because in real estate like in life, with change comes opportunity.
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