Property investors on the lookout for the next capital growth hotspot regularly turn to the Residex Predictions Report for leads. The report identifies 109 suburbs and towns nationally that are most likely to deliver better than average growth over the next five to eight years.

The suburbs and towns ranked in the Residex Predictions Report have capital growth that is forecast to be between an average of 4% and 11.1% per annum over the next five years, and between an average of 5.1% and 8.4% per annum over the next eight years.

Based on Residex’s predictive model, the suburb of Gordon in the ACT is the best performing suburb. House values in Gordon are predicted to grow by an average of 8.4% annually for the next eight years.

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

“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,” Tim Lawless, CoreLogic’s Asia Pacific research director, told Yahoo! Finance.

However, the predictive model is not without its limitations. “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,” Lawless said.

The December report is the first compiled by Residex since the company was acquired by CoreLogic last year. The report currently uses the combined data resources of both companies.

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