Where is Australia's best growth prospect?

Gordon, the ACT suburb, has been pinpointed in the latest Residex Predictions Report as the nation's top growth prospect.

The list identifies 109 suburbs and towns nationally that are most likely to deliver better than average growth over the next five and eight years.

The report ranks the top 109 suburbs where predicted capital growth is forecast to be between an average of 4.0 percent and 11.1 percent per annum over the next five years, and between an average of 5.1 percent and 8.4 percent per annum over the next eight years.

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Based on Residex’s predictive model, the best performing suburb has been identified as Gordon in the ACT, 28 kilometres south of Canberra, where house values are predicted to grow by an average of 8.4 percent per year for the next eight years.

The median house value in Gordon is currently $576,662 and the median value growth was a strong 5.6 percent in the year to October 2016.

For that median price a four bedroom home, such as the one at53 Wootton Crescent (above), is available for $575,000.

Similarly a three bedroom home at 6 Price Place (below) has been listed for sale for $589,000.

Examples of houses that have been sold at Gordon includes a three bedroom home at 11 Flegg Crescent (below) that was sold for $565,000.

Similarly a three bedroom home at 10 Lawlor Place (below) was sold for $405,000.

The report is a valuable starting point for property investors researching where to buy next, Kylie Davis, Residex head of marketing said.

“The suburbs listed in the report are the ones that we would expect to perform well in future years based purely upon the statistical patterns that the Residex algorithm has identified in their historical growth rates,” said Tim Lawless, CoreLogic’s Asia Pacific Research Director.

“Residex’s predictive model doesn’t allow for new developments, changing demographic patterns, improved infrastructure or any other such factors and these can have a substantial impact on the capital gain prospects across a suburb or town.”

The December report is the first Predictions Report compiled by Residex since the business was purchased by CoreLogic in 2016, and uses the combined data resources of the two businesses.

The data is drawn from median values using the CoreLogic automated valuation model, rather than median sales prices. This is an important distinction as it takes into account the value of all properties within the suburb, not just those that have transacted across the period. This makes it a more reliable and stable indicator of values across the region.

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The suburb of Pemulwuy in NSW held the number two spot with house values expected to provide an average of 8.34% growth per year over the next eight years. Batemans Bay on the NSW South Coast came in third position with an average of 8.29% growth anticipated per year over the next eight years. Houses in Middle Swan ranked fourth while houses in Brighton, Tasmania ranked fifth.

In the national report, 107 suburbs had top predictions for houses while there were two suburbs for units. Across the country, 60 of the top 109 suburbs were in regional Australia and 49 were in city areas.

Broken down by state, 16 were in the ACT, 39 suburbs were within NSW, 15 were in Queensland, there was 1 from SA, 13 from Tasmania, 6 from Victoria and 19 from WA. Separate reports are also available for Victoria, NSW and Queensland.

Mr Lawless said the report was not definitive and other suburbs could also perform strongly. Investors should conduct their own additional research before deciding to commit to a purchase.

“As with any forward looking analytic, the reports are predictions, not a guarantee of future growth, and taking into consideration your own personal circumstances is vital,” Mr Lawless said.

Get your full copy of the Residex Predictions Report here for $195 per state or $250 for the national report.