Due Diligence
Property Due Diligence Checklist for Australian Investors — Built Around What Actually Survived Backtesting
Most property due diligence checklists are lifestyle checklists. School ratings. Cafe density. Commute times. Train line proximity. Those are the right questions when you’re buying a home to live in. When you’re buying an investment, the question is different: which suburb will outperform the market?
This checklist is built around the metrics that actually produced results when backtested across 78 Australian suburbs — 28 that boomed, 50 that didn’t — and validated across 12,360 postcode-months of real market data. Two layers: hard filters that disqualify a suburb before you go further, and five scored components that rank the suburbs that pass.
The Hard Filters
Before you spend hours researching a suburb, four numbers tell you whether it’s worth proceeding. A suburb must pass all four — miss any one and move on. These aren’t soft preferences; they’re the conditions that defined every booming suburb in the backtest dataset.
Annual growth ≥ 5%
You want a suburb that’s already moving. Below 5% annual growth and the market hasn’t confirmed demand. A suburb with the right profile but flat prices is a theory, not a signal.
Where to check
YIP (yourinvestmentpropertymag.com.au) — CoreLogic-backed suburb profiles showing annual and quarterly growth. Domain suburb profiles also publish recent growth figures.
Days on market ≤ 45 days
How quickly properties sell tells you whether buyers are urgently competing or calmly browsing. At 45 days or fewer, the suburb is tight. Above 45 days and supply is comfortable relative to demand — not the conditions that drive price acceleration.
One important nuance: DOM figures are only reliable for suburbs selling more than roughly 30 homes per year. In thinner markets, a single fast sale can drag the median to 10 days; one slow listing can push it past 150. Below about 15 annual sales, the figure isn’t usable at all — it’s a reflection of one or two transactions, not market conditions.
Where to check
YIP suburb profiles. Domain listings show time-on-market per property. Annual sales volume is also on YIP — check it first to confirm the DOM number is reliable.
Vacancy rate ≤ 2%
Low vacancy means renters are competing for limited stock. That signals genuine occupier demand underpinning the suburb — not just investor sentiment. Above 2% and the suburb is comfortably supplied, which doesn’t produce the supply squeeze that drives price pressure.
Where to check
SQM Research — free postcode-level vacancy charts going back 16 years of monthly history. No paywall. Enter the postcode and read the current rate and its trend direction.
Median price ≤ $800K
Every boom in the 78-suburb backtest was led by suburbs priced well below the capital city median. The $800K cap keeps you in the affordability zone where growth actually happens. At higher price points, the pool of buyers who can afford to enter shrinks and the headroom that drives price appreciation is already consumed.
Where to check
YIP or Domain suburb profiles for the current median price.
Why the hard filters exist
These four thresholds are the entry gate, not a soft preference list. A suburb that fails one of them — no matter how compelling the story — does not qualify for scoring. In the 78-suburb backtest, every booming suburb passed all four. Not most of them. All four.
We run this checklist across 393 suburbs, fortnightly.
BoomAU scores every suburb that passes the hard filters and delivers Strong Buy / Buy / Watch / Pass labels filtered to your budget band. Join the wishlist.
The 5 Scored Components
Once a suburb clears all four filters, it gets scored across five components. The weights were determined by how much predictive power each component demonstrated in backtesting — not by intuition.
1. Momentum
Weight: 30%Price growth acceleration
Momentum is the heaviest component because accelerating demand is the clearest signature of a boom in progress. A suburb growing at 8% this year that grew at 4% last year scores higher than one growing at 8% that grew at 12% last year — even though the raw growth figure is identical. The direction of change matters as much as the level.
What to check
- ✓Compare current annual growth to the previous year’s figure on YIP. If growth is picking up, momentum is positive.
- ✓Quarterly growth figures give a more recent read on whether acceleration is still underway.
- ✗A suburb with falling momentum — slowing from 20% to 8% — may still have strong growth, but early buyers are already exiting. The best entry point is behind you.
2. Growth Strength
Weight: 25%Annual growth scored directly
Separate from momentum, this is the absolute level of annual growth. A suburb growing at 18% scores higher than one growing at 6%, regardless of trajectory. Both components together capture the full picture: how fast is growth, and is it speeding up or slowing down?
One context note from the backtest: what “good” growth looks like shifts with the national cycle. Pre-2015, the median boom delivered 1.3% growth. Post-2020, the median boom was 16.2%. So the score rewards a suburb relative to its peers in the current period — not against a fixed absolute threshold.
What to check
- ✓Annual growth rate from YIP or CoreLogic suburb profiles.
- ✓Compare across shortlisted suburbs in the same city — which ones are outrunning peers?
3. Tightness
Weight: 20%Days on market + vacancy rate
Tightness combines the two supply-side signals into a single picture of buyer/seller power. When properties are moving fast and rental supply is thin, buyers compete hard — which is the condition that sustains price growth. When either signal loosens, the environment for further appreciation weakens.
What to check
- ✓DOM under 30 days: Active buyer competition. Very tight market.
- ✓DOM 30–45 days: Tight, still qualifies. Monitor for trend.
- ✗DOM above 45 days: Fails the hard filter — buyers aren’t urgently competing.
- ✓Vacancy below 1.5%: strong rental demand, supply genuinely constrained.
4. Sustainability
Weight: 15%Rental yield + vacancy trend
A boom driven entirely by speculative demand without fundamentals behind it will correct. Sustainability checks whether rental yield and vacancy are pointing the right direction — which indicates real occupier demand, not just investor sentiment driving prices up.
The combination that scores well: rising yield on falling vacancy. That pattern tells you the suburb has genuine residents competing for limited stock, which is a more durable foundation than speculative buying alone.
What to check
- ✓Rental yield from YIP or CoreLogic suburb profiles.
- ✓Vacancy rate trend direction on SQM Research — is it falling, flat, or rising? Falling is the signal you want.
- ✗Rising vacancy alongside rising prices is a warning sign: demand may be coming from buyers speculating on capital growth, not occupiers needing to live there.
5. Affordability Headroom
Weight: 10%Price relative to capital city median
This is the only cross-suburb ranking signal that survived when we controlled for the market tide — meaning it predicted which suburbs would outperform peers in the same period, not just in the same direction as the broader market.
The mechanism: when a suburb is priced well below the capital city median, buyers priced out of more expensive areas progressively shift demand to it. That displacement drives price growth. Once a suburb closes its gap with the city median — once the headroom is consumed — that source of demand pressure weakens.
The backtested relationship is monotonic and clean: suburbs priced below the city median consistently outperform. Suburbs priced above 1.5x the city median consistently underperform. The effect held across every subsample we tested.
What to check
- ✓Look up the capital city median (Domain publishes this quarterly for each capital city).
- ✓Compare it to the suburb’s median price from YIP.
- ✓Well below the city median = meaningful headroom remaining.
- ✗At or above 1.5x the city median = the data says underperformance is the more likely outcome.
The most important item on this checklist
If you only have time to check one thing, check the affordability gap. It’s the only signal that predicts which suburb beats its peers — not just whether the market tide is rising.
393 suburbs. 5 components. Scored fortnightly.
BoomAU runs the full checklist automatically and delivers tier labels filtered to your budget band. Join the wishlist to get early access.
What Passing the Checklist Actually Predicts
Once scored across all five components, a suburb lands in one of four tiers: Strong Buy, Buy, Watch, or Pass. In a walk-forward backtest across 12,360 postcode-months, those tiers showed perfectly monotonic discrimination — meaning each tier outperformed the one below it, without exception.
| Tier | Excess return | Beat market | n |
|---|---|---|---|
| Strong Buy | +7.5pp | 71% | 2,103 |
| Buy | +1.3pp | 55% | 3,349 |
| Watch | −0.7pp | 47% | 5,788 |
| Pass | −6.4pp | 28% | 1,120 |
Walk-forward backtest, 12,360 postcode-months, no lookahead. Excess return = suburb 12-month growth minus market median growth. Full methodology →
The spread between Strong Buy and Pass is 13.9 percentage points per year. Same asset class. Same country. Just different suburbs — identified in advance by working through the checklist above.
What This Checklist Deliberately Leaves Out
There are metrics that sound like they should be on this list but weren’t included because they failed when tested. Knowing what not to check saves as much time as knowing what to check.
Population growth — failed
Population growth is too slow-moving and too coarsely measured to time a suburb entry. It affects whole corridors over years, not a specific suburb over the investment horizon. Backtesting it as a predictor delivered 55% accuracy — a coin flip.
Infrastructure spending — failed
A new train station or hospital announced for a corridor sounds like a suburb-level growth driver. In practice, infrastructure spending affects whole regions over decades, and the announcement-to-completion gap is long enough that suburb-level prices may have already fully repriced by the time the project is done. It failed as a suburb-level predictor.
Building approvals — failed
New supply pipeline sounds logical as a predictor of where prices won’t go. In practice, approvals data is state-level and produces only a weak suburb-level signal. Not enough precision to be useful.
5-year price momentum — misleads
Mean reversion dominates. Suburbs that have already outperformed over five years tend to underperform going forward. Chasing a suburb because it’s had a great run is backwards — that run has consumed the headroom that drives the next one.
The harder insight
Most of the metrics property investors talk about at meetups and in buyer’s agent webinars — population growth, infrastructure spending, building approvals, long-run momentum — failed backtesting. The metrics that worked are the quieter, less story-driven ones: how tight is the market right now, how affordable is the suburb relative to the city, and is growth accelerating or decelerating?
How to Use This Checklist
The full checklist takes about 20–30 minutes per suburb once you know where to find the data. Here’s a practical order of operations:
- 1
Check the hard filters first
Growth ≥ 5%, DOM ≤ 45 days, vacancy ≤ 2%, price ≤ $800K. If any fail, stop. Ten minutes on a suburb that fails a filter is ten minutes wasted.
- 2
Check the affordability gap
Look up the capital city median on Domain. Compare to the suburb median. If the suburb is well below the city median, it has headroom. If it’s at or above the city median, the strongest growth signal is already closed out.
- 3
Assess momentum and growth strength
Is growth accelerating or decelerating? Compare this year’s figure to last year’s. A suburb with growing momentum and strong absolute growth is the target.
- 4
Check tightness and sustainability
Vacancy trend on SQM (falling or flat?). Yield on YIP (holding up or compressing?). These two signals confirm whether the boom has durable occupier demand behind it or is running on speculation alone.
All the data above is free and publicly available. The effort isn’t in finding it — it’s in running the same process across enough suburbs to find the ones that score well on all five components simultaneously. That’s the bottleneck.
BoomAU runs the full checklist across 393 suburbs every fortnight — the ones that pass the hard filters under $800K — and surfaces the Strong Buy, Buy, Watch, and Pass labels filtered to your budget band (35 suburbs under $400K, 149 under $600K, 204 under $800K). Detection catches booms 6–12 months after they start, which still captures 60–85% of total gains.
The backtest methodology and the 78-suburb validation results are published on our proof page. No gating, no email required. Check the numbers yourself before you trust them.
Join the Wishlist
We'll email you when BoomAU launches — starting with the budget range you care about.
Be first in line
- ✓Fortnightly Strong / Good / Fair / Weak signal labels per suburb
- ✓Filtered to your budget band
- ✓Built on a backtest of 12,360 postcode-months