Why smart investors should follow their favourite artists
Photo: Getty
Brooklyn, in inner-Melbourne, is a little different in character to its better-known American cousin, but it does share the same humble beginnings as a working class, industrial suburb.
Both were left to slowly crumble, only to be re-energised by nomadic creatives brave enough to push the boundaries of suburbia.
I discovered Melbourne’s Brooklyn – once a perfect haven for the cash-strapped – in the mid-1990s. It had clearly seen better days: Every shop window was papered up and even the postwar Greek immigrants had fled.
Nothing but the familiar hum of sewing machines drumming behind sheeted windows could be heard between screeching brakes as the trucks flew along Geelong Road.
I was there to interview the now well-known artist, Graham Fransella, whose large-scale works are favourite with corporate Australia. His art commands impressive prices but Fransella has suburbs like Brooklyn to thank for affording him the space to work and develop his career. And Brooklyn has artists like Fransella to thank for its rejuvenation.
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The trend of artists reviving struggling neighbourhoods by moving into cheap studio and living space is dubbed “the SoHo effect”. This refers to the 1970s Manhattan artist enclave that is now home to luxury chain stores.
Artists push the frontiers of suburbs where no one – not even first-home buyers – will otherwise venture. When other buyers and renters follow the artists, bringing gentrification with them, rents and prices skyrocket – forcing the creatives out, in search of the next sleeping beauty.
The effect on the real estate market is magical. Any smart investor should have their binoculars trained on up-and-coming artists to see where they are headed next.
Another textbook example of the SoHo effect is Footscray, also in Melbourne’s inner-west. Artist Neil Taylor, actor William McInnes and comedian Russell Gilbert all call Footscray home. They are long-term residents of a suburb long considered downtrodden, but where the median price for a two-bedroom house is about $835,000.
Investor Rebecca Murphy was one of those drawn to Footscray by its celebrity residents.
“I can honestly say that it was a collective effort by everyone who bought in during the ’90s but just knowing those well-known people lived there … made it easier to justify why we were persisting with the suburb,” she said.
“It starts with little things like a groovy bar, tasteful renovations done on a budget, people with an eye for style and good landscaping.”
Meanwhile, in NSW, art festival director and broadcaster Marcus Westbury founded Renew Newcastle with his own money in 2008. He was prompted by returning to live in his childhood hometown and finding it depressed and struggling, its central city marked by “for lease” signs.
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“Everyone wants someone else to be the first to do something,” Westbury said. “Everywhere I looked, the rot was worse than I remembered.
“Streets that in my memories were vibrant, active, and filled with family and friends had fallen into disrepair and despair. Entire blocks were dominated by buildings that had been boarded up, gutted, and destroyed.”
Westbury’s low-budget urban renewal scheme kickstarted access to more than 30 empty Newcastle buildings for creative enterprises, artists and cultural projects.
Now Newcastle is a thriving city, known for its beautiful weather, a coastline to die for and good access to Sydney, as well as its thriving arts scene. It has more artists per capita than any other Australian city.
Once again, investors have followed. Maryanne Spencer bought a rental property near Newcastle University 10 years ago.
“I have never had problems renting it and it is a fantastic property that has great potential for development,” she said. “With the changes that have come to the area in the past decade, I am happy to be in for the long term.”
