Did you know…? Cheap suburbs become expensive suburbs

Have you ever heard the saying ‘cheap suburbs become expensive suburbs’? Simply put, this is the direct result of capital growth. The population is divided into high, middle and low-income earners and as the population increases, so does the number of people in each of these income groups. The high-income earners will progressively start pushing out people from the middle-class suburbs. Thus, suburbs that were once middle class will become upper class since middle-income earners can no longer afford to live there.

Similarly, this trend will continue in suburbs that may have a particular stigma about them, like high crime rates or predominantly housing commission. When urban renewal takes place and these suburbs clean themselves up, the undesirable population can no longer afford to live there and are forced to move out. Consequently, these cheap suburbs become more expensive (now middle-class) suburbs and property values are likely to increase overall.

As you can see, the property market is always moving and always changing, but in the long term still very predictable. Not to mention, always increasing in value making it a very safe and stable place to secure your financial wealth.

Stay tuned for more daily insights from Wealth Through Property.

~Daimien Patterson

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