OXFORD Street is the homosexual heart of Sydney. Mardi Gras marches down it, gay clubs and shops have sprung up along it; it's a metaphor for the visible gay community.

Yet over the past decade it's gone from vibrant gay space to faded glory, with high retail vacancies and growing indifference in the gay community. The changes reflect both gay culture and wider socio-economic processes. Exciting research opportunities are emerging for geographers, social researchers and urban planners. It must be asked: Is the Golden Mile tarnished?

Oxford Street emerged as a gay space during the 1960s, with gay bars, cafes and sex shops migrating from nearby Kings Cross. Until the early '80s, Darlinghurst and Paddington (through which cuts Oxford Street) were run-down victims of manufacturing employment shifting out of the city centre. However, they were cheap and densely populated, mostly by non-conservative people, attracting many gay residents.

The Oxford Street precinct thus established itself. Gay men (and a few women) could be visibly ``homosexual'' there, establishing their own territorial political base. In 1978, the gay community grabbed the nation's attention by marching down Oxford Street, a brave political act that claimed it as gay space.

In the '80s and '90s, the street's role as a gay political, cultural and leisure precinct grew. Homosexuals from suburban and country areas migrated there, escaping the intolerance of home and finding a supportive, exciting community in which to come out. The AIDS crisis consolidated the gay community there.

The area was not so much a ghetto, but a self-made enclave offering flamboyant lifestyles and safety in numbers. Gay culture emerged, expressed through leisure, fashion, nightlife and sex.

In the past few years, however, things have changed. From the mid-'90s, mainstream retail chains and fashion boutiques began flocking to Oxford Street. Gentrification, which first emerged in Australia in '60s Paddington, picked up speed. The move towards skilled inner-city service jobs in Sydney boosted demand for housing in the area. Run-down dwellings renovated by gay men became popular with families and young (often straight) professionals. Prices rose and Oxford Street became less affordable for gay residents and shopowners. Commercialism took over.

Then in 2003 the Sydney property market stagnated, slowing retail growth. In 2004 Westfield Bondi Junction opened, sending Oxford Street retail into a tailspin. Current vacancy rates there have been estimated at 20 per cent, with rising reports of crime and a declining street life. There is also evidence of a shrinking homosexual population in the area. Some new gay clubs have opened recently, but many more have closed. Oxford Street, it seems, is in decline.

Wider social changes have also occurred. Popular culture now embraces gay, with many movies and television shows featuring gay characters and themes. Metrosexuality is popular. Children are growing up without having witnessed strong homophobia; many older kids have gay friends, and some younger ones even have gay parents. Gay is being seen as an acceptable sexual and lifestyle preference, as the institutional barriers once constructed against gay men and women gradually, but surely, fall.

The Mardi Gras has gone from outspoken political activism towards being just another commercialised event on the gay party calendar, attracting many heterosexual spectators. Increasing numbers of straight men and women are also patronising Oxford Street's gay clubs, considering them a fun night out. Homophobic violence still exists, but overall, society is recognising and accepting gays.

Despite wider community acceptance of ethnical, cultural and sexual differences, and property markets making Oxford Street increasingly expensive, there has been no corresponding emergence of a large, visible and vibrant gay community elsewhere. Many of the original political goals have been achieved: legalised gay sex, stronger anti-discrimination laws and local council support. The gay community has been a victim of its own success.

Despite (or perhaps because of) these changes, gay lifestyle has lost its appeal to many younger gay people. Mardi Gras funding difficulties in recent years suggests a declining interest in gay political struggles. Many openly homosexual people feel comfortable living and working in other parts of the Sydney area. The internet has reduced the need for gay services and entertainment to be located together, and transformed the way people meet.

Diversity and individualism are becoming more apparent within the gay community. Younger gays are rejecting stereotypes about what their sexuality should entail, instead seeking out more meaningful communities. Which does one choose? Gay, student, Asian, Christian or all of the above?

Cliche-gay is still popular, but losing ground to a smorgasbord of other identities. Oxford Street no longer represents gay nirvana, the rite of passage once sought by many young gay men. Conformity (such as the '80s clones of white shirts, tight jeans and muscular physiques) is going out of fashion. Gay is losing its cultural distinctiveness along with its spatial concentration.

Gay space in Sydney is undergoing a profound transformation. Oxford Street is likely to remain gay in the near future, but other places are attracting more and more gay residents (such as nearby, cheaper, Newtown). The lifestyle benefits of the inner city (community acceptance, jobs in creative industries) are likely to remain gay drawcards, but as Sydney grows, even these are being diluted.

The long-term future of a gay Oxford Street is unclear. Has a downturn in the retail market and an influx of heterosexual partygoers turned the street straight? Has it become a fauxhemia rife with commercialism and unsatisfying lifestyles? Are these just temporary historical aberrations?

These answers may take years to emerge, but perhaps gay Sydney's biggest existential concern has changed from repression to assimilation. In post-industrial cities worldwide, gay communities are fragmenting. Sydney's gay community must ask the uncomfortable question: Has diversity and acceptance lead to decline?