Days on market
Wednesday 28 Jan 2015
We have a history of thinking of home ownership as the ultimate Aussie dream. Building, renovating, buying or renting, as a nation we obsess about property with fervour some liken to a religion. But despite the dreaming, planning and decorating when it all comes down to it property is all about the numbers.
Postcode, land size, bedrooms, bathrooms, potential income, potential price growth, potential mortgage repayments and of course the big one….price. But the other stat that gets some attention is Days on Market which is generally presented as a suburb average.
How long properties take to sell is supposed to provide an idea to vendors and buyers of the average level of demand and competition in a particular suburb. It’s also commonly used as a measure of the success and productivity of an individual agent.
The problem with averages is that they reflect, well, the average!
It’s easy to make sense of the ‘average’ in relation to price because the variations in property are obvious. Different selling timeframes can be harder to explain.
For example In Pyrmont and the CBD the APM data for 2014 shows the average days on market is 36 days for houses and 65 for units. However what that statistic won’t reflect is the fact that over roughly the same period one of our agents sold 25% of his listings BEFORE the property officially hit the market! At the same time those numbers include properties massively overpriced but listed by vendors who will be motivated to sell only if that price is achieved.
So watch the DOM numbers with interest but don’t automatically treat them as gospel.