New Investability tool reveals the gold, silver, and bronze medal suburbs

This helpful tool forecasts relative future housing demand of a specific locality. In other words, it helps to determine which properties could be good (or poor) investments.

Residz Team 4 min read

Kambah’s Investability score gets gold!

If an Olympics were held for Investability, Kambah in the ACT and Fig Tree Pocket in Queensland would be up on the dais accepting a gold medal. They’re in a group of only eight localities in Australia with an Investability score of 100, according to the Residz Investability Index. This helpful tool forecasts relative future housing demand of a specific locality. In other words, it helps to determine which properties could be good (or poor) investments.

The eight areas scoring 100 are:

Source: Residz

Fig Tree Pocket in Brisbane is gold, and it’s in good company.

A further three areas of NSW have Investability scores that would round up to 100. The beachside suburbs Manly-Fairlight (99.97), Double Bay-Bellevue Hill (99.68), and Bondi-Beach - North Bondi (99.46) are among 72 SA2s regions** with a score of over 90.

What goes into an Investability score?

Residz’s Investability Index is modelled on historical transactional and social area data analysis. It forecasts relative future housing demand across every suburb in a state by analysing variables historically associated with a level of propensity to pay for housing in various mortgage repayment and rent payment brackets. Some of the key variables are:

The index will also shortly include future state and federal infrastructure planning.

Check your own area

Remote work and lockdown fatigue through Covid-19 has made a lot of areas popular that were once backwaters or retirement areas. Your area may have a low Investability score but has come into its own as investors, and tree and sea changers, snap up all the affordable properties. The Investability score is useful for understanding the real value and underlying demand factors of an area when FOMO and frenzy are not in the picture. Check the score of your own address by typing it into Residz.com, and clicking on the Neighbourhood tile.  

Plenty of gold out there

The average Investability rating across all of SA2 areas is 55.

The top 20% in the index are those with a score in excess of 73. Any of those would be silver medallists in our Investability Olympics. It’s worth noting that Hamilton in Queensland, proposed site of the athletes village for the 2032 Brisbane Olympics has an Investability score of 79.

Other areas include:

You can see why the Investability of these areas is solid. While off the mainland, Margate, Tasmania, for example, is a little seaside village, and a popular tourist spot.  Ashburton is a postwar suburb just 12 km from Melbourne. In 1987 the median house price in Ashburton in Victoria was 30% above the median for metropolitan Melbourne and in 1996 it was 36% above the metropolitan median.

Bronze still has a shine

For bronze contention, and to feel more secure about the investment potential of any property, you might look at an Investability score that nudges the top 20%. So let’s award bronze to those suburbs over 65 but under 73.

These include:

Globe Derby Park is South Australia’s harness racing hub and is 15 km from the Adelaide CBD.  North Tumblegum is on a river in the Tweed shire, about 660 km from Sydney.

Queensland gets the state gold

Across the states, Queensland with an average Investability score of 65 is the winner. For comparison, the NSW state average is 59 and Victoria’s state average is 44. There are many highly sought-after areas in all three states, but overall, Queensland is a better investment than NSW or Victoria.

Pick higher up the list

There are many factors that go into choosing the right investment for your needs. However, you may want to pause and question your assumptions before investing in the bottom 20% (those with a score less than 37). Perhaps avoid investing in any property with a score under 50 unless you have no other options. Many first home buyers will be in this category but try to choose the most affordable home in the higher investment score regions if you can.

At the other end of the scale, buying into a highly rated area may mean future affordability challenges will restrict the price growth (given that it is most likely at the higher values already).

Research research research

You can’t go past research, research, research. The Investability Index is a valuable tool for you to then use other information that might support buying in an area which is currently rated at, say, an average 55, but experiencing a high regional shift and gentrification. For example, Berry - Kangaroo Valley in NSW has a score of 55, due to particularly low scores for income and population, but this area has seen a 67% annual growth in home value thanks to Covid-19’s impact on workplace and lifestyle needs.

Summing up

Of the 2,175 SA2 Investability indices in the Residz Investability Index:

**Definition of an SA2 region

SA2s represent a community that interacts together socially and economically. Each SA2 generally has a population between 3,000 and 25,000 with an average of about 10,000 people. Remote and regional areas come under special design rules to make meaningful SA2s.    

Images: Kambah, ACT, and Fig Tree Pocket, Qld. Housing Demand State Index, Google Map Data, Residz.com.