A MELBOURNE researcher has discovered the location of a gene that causes a rare hair disease, in a breakthrough that could lead to a cure for baldness.

Jack Green, a dermatology registrar and research fellow at St Vincent's Hospital, said about 80 per cent of Australian men and 50 per cent of women "suffer some degree of baldness, some degree of thinning of hair is quite common" by age 50.

"But women losing their hair causes significant psychological morbidity," Dr Green said.

He stressed that his discovery about the gene causing pili annulati, which creates cavities in the hair shaft, was "only one small step" towards learning more about the genetics of hair disorders.