The caffeine hit that's underpinning the pricier gentrification of our suburbs and towns

Apparently Footscray is just one good latte away from joining the macchiato-driven suburbs of Richmond, Fitzroy, Hawthorn, South Yarra and Brunswick.

These coffee-loving suburbs rank highly as sought-after areas for property buyers, according to research analysing 1300 cafes in the greater Melbourne area.

The report by the Secret Agent, Paul Osborne looked at the gentrification of Gertrude Street, Fitzroy, where a one-bedroom apartment sold for $175,000 in 1996.

It recently sold for $669,500 in 2012 after the area was transformed into one of Melbourne's trendiest locations.

Footscray could be the next suburb to be gentrified, the report said, due to its proximity to the CBD and affordability.

"Its neighbouring western suburbs of Seddon and Yarraville have already undergone gentrification and it seems Footscray is going to be next," the report said.

Of course there's nothing new about these urban villages with cafe lattes on offer within walking distance. Streetlife as almost as important as what's behind the Federation facades. All enhanced by the availability of time and technology.

But of more immediate importance, and without referencing the cafe society aspect, the Reserve Bank of Australia assistant governor Malcolm Edey has acknowledged the property market was growing at a higher than average rate, but dismissed suggestions it's a bubble.

Dr Edey said the pace of house price growth was not a concern for the time being.

“Demand for housing is strengthening at the moment. There is no doubt about that,” he told a Financial Services Institute of Australasia conference.

“We are in a one of the higher-than-average periods at the moment but the continued rushing to reach for the bubble terminology . . . every time the rate of increase in house prices is higher than average, which by definition is 50% of the time, you just have to be unrealistically alarmist on making that call every time it happens.”

The growing debate about the growth of house prices in Sydney and other capital cities stems from suggestions the RBA’s record-low interest rates will trigger a property price bubble.

There have been calls for tougher lending restriction emulating the Reserve Bank of New Zealand to prevent banks from fuelling unsustainable house price increases.

“But it is important to keep things in perspective," Dr Edey said.

"Looking back over the last 10 years, house prices have been rising at a rate similar to or on average less than the rate of household incomes.

“The ratio has been roughly flat or tending actually to fall. Within that trend, there will be cycles and periods where that ratio rises or falls.

“There are periods when the rate of increase in house prices has been higher than average and periods when it has been lower than average,” Dr Edey said.

Capital city house prices rose 5.3% in the year to August, figures from RP Data-Rismark show.

Sydney’s housing market has been back leading the pack with gains of 7%, but after a deacde of tracking below the national capital city median growth.

Dr Edey says the country was currently experiencing a low rate environment and that one of the effects was the stimulation in housing demand.

“We are seeing that influence in the housing sector and that’s not surprising because it’s an interest rate sensitive sector,” he says.

Not a word about blowing the froth off the top of a cappuccino from him though.

I am sure there's a thesis there for an academic that wishes to show the partial cause and effect of our mutual passions for coffee, conversation, and property. It might start at "21" at Double Bay which was probably the first European-style coffee shop established in Sydney back in 1958.

And of Footscray's chances? Well Victoria University's desire to transform it into  a "university town" over the next decade is likely to have more impact than a highly recommended place for latte's in the Age epicure. VU have announced plans to lease space in the centre of Footscray by the start of next year with a book shop, office space and ofcourse a university coffee shop. It ultimately wants to extend its 20,000 student Footscray campus over Ballarat Road closer to the centre of the town. Both the university and other organisations are envisaged to then commit to larger projects including a business incubator and more student accommodation.

And in the meantime hopefully the town is rid of its heroin drug trafficking reputation.