The former centre of the ragtrade, Surry Hills has experienced marked gentrification over the past decade, transforming it into a trendy inner city address renowned for its dining, galleries and design stores. Home to a large population of artistic types and young executives who enjoy its cosmopolitan atmosphere and proximity to the city, its streets are lined with traditional terrace houses and warehouse conversions.

he first land grants in Surry Hills were made in the 1790s. Major Joseph Foveaux received 105 acres (0.42 km2). His property was known as Surry Hills Farm, after the Surrey Hills in Surrey, England. Foveaux Street is named in his honour.[4] Commissary John Palmer received 90 acres (360,000 m2). He called the property George Farm and in 1800 Palmer also bought Foveaux's farm. In 1792, the boundaries of the Sydney Cove settlement were established between the head of Cockle Bay to the head of Woolloomooloo Bay. West of the boundary, which included present-day Surry Hills, was considered suitable for farming and was granted to military officers and free settlers.

After Palmer's political failures, his reduced financial circumstances forced the first subdivision and sale of his estate in 1814. Isaac Nichols bought Allotment 20, comprising over 6 acres (24,000 m2). Due to the hilly terrain, much of the suburb was considered remote and 'inhospitable'.

In the early years of the nineteenth century the area around what is now Prince Alfred Park was undeveloped land known as the Government Paddocks or Cleveland Paddocks. A few villas were built in the suburb in the late 1820s. The suburb remained one of contrasts for much of the nineteenth century, with the homes of wealthy merchants mixed with that of the commercial and working classes.

In 1820, Governor Macquarie ordered the consecration of the Devonshire Street Cemetery. A brick wall was erected before any interments took place to enclose its 4 acres (16,000 m2). Within a four year period the cemetery was expanded by the addition of 7 acres (28,000 m2) to its south. A road was formed along the southern boundary of the cemetery in the first half of the 1830s and was called Devonshire Street The Devonshire Street cemetery, where many of the early settlers were buried, was later moved to build the Sydney railway terminus. Central railway station was opened on the 4th August 1906. The area around Cleveland and Elizabeth streets was known as Strawberry Hills. Strawberry Hills post office was located at this intersection for many years.[5]

In 1833, the Nichol's estate was subdivided and sold. One purchase was by Thomas Broughton and subsequently acquired by George Hill who constructed Durham Hall on this and adjoining lots. Terrace houses and workers' cottages were built in Surry Hills from the 1850s. Light industry became established in the area, particularly in the rag trade (clothing industry). It became a working class suburb, predominately inhabited by Irish immigrants. The suburb developed a reputation for crime and vices. The famous Sydney underworld figure Kate Leigh (1881?1964), lived in Surry Hills for more than 80 years.

Surry Hills was favoured by newly arrived families after World War II when property values were low and accommodation was inexpensive. From the 1980s, the area was gentrified, with many of the area's older houses and building restored and many new upper middle-class residents enjoying the benefits of inner-city living.

Source: http://en.wikipedia.org/wiki/Surry_Hills,_New_South_Wales