In the world of real estate, understanding the numbers behind property dynamics can make all the difference for investors and homebuyers alike. This Property Metrics and Indicators Series aims to break down the essential metrics that shape market insights and empower smart decision-making. From gauging demand trends to evaluating property potential, each metric we cover sheds light on different facets of the property landscape.

Days on Market (DOM) launches this series, standing as one of the most revealing metrics in property market analysis. DOM not only reflects market strength but also informs critical pricing strategies and negotiation leverage, offering both buyers and investors a way to assess property interest and demand. For an in-depth look at the role of metrics in real estate, visit our Real Estate Market Analysis: The Complete Guide to Property Investment Metrics and Real Estate Investment Analysis: 11 Key Steps for Successful Property Investing blogs, where we explore how and why metrics matter in building a successful property strategy.

1. What are Days on Market?

This measures the average time properties spend listed for sale in a specific market before selling. This property market analysis metric starts counting from the day a property is officially listed for sale and ends when a contract is signed. DOM can be calculated for individual properties or as an average across specific market segments, providing crucial market temperature readings.

2. Why is This Metric Important to Property Investing?

DOM serves as a vital property market analysis tool for several reasons:

• Indicates market strength and buyer demand.
• Helps identify pricing trends and market shifts.
• Provides negotiation leverage.
• Signals potential investment opportunities.
• Assists in determining market cycle positions.

Understanding this metric through thorough property market analysis helps investors make informed decisions about when to buy, sell, or hold properties.

3. What Happens if You Don’t Use DOM as a Metric?

Ignoring this metric in your property market analysis can lead to several pitfalls:

• Misreading market conditions
• Overpaying for properties
• Missing negotiation opportunities
• Poor timing of market entry or exit
• Reduced investment returns
• Inability to spot market trends early

4. What Does the Ideal Metric to Look Like?

The ideal measurement varies by location and market conditions, but generally:

Hot Market:

• 30 days or less indicates strong demand.
• Properties often sell within 14-21 days.
• Multiple offers common

Balanced Market:

• 30-60 days considered normal.
• Steady buyer activity
• Fair negotiation conditions

Slow Market:

• 90+ days indicates slower conditions.
• More room for negotiation
• Potential opportunities for investors

5. How is It Calculated?

The basic calculation is :

Date of Sale – Initial Listing Date

For market averages:

Total DOM for all sold properties ÷ Number of properties sold

6. Strategic Applications Within Different Investment Types

Buy and Hold Strategy Applications

You can use this metrics to identify market entry points and the timing of purchases for long-term growth – buy and hold strategy.

Identifying Market Entry Points

It’s suggested to enter the market when DOM exceeds market averages by 20% or more. This would indicate seller motivation.

At 20%+ above average DOM, you often see:

• First round of price reductions
• Increased seller willingness to negotiate.
• Less competition from other buyers
• Better opportunity to secure favourable terms.

Track trends across 6-12 month periods to identify cycle position. Compare current to 5-year averages for market timing. Rising DOM + increasing inventory = potential market softening which can lead to purchase opportunities.

• You can focus on properties more than 60 days on market for better negotiating position.
• Build watchlists of properties hitting critical thresholds (45, 60, 90 days)

Timing Purchases for Long-term Growth

Opportunities for the timing of purchasing a property for Long Term Growth can be identified by:

• • Targeting areas where DOM is decreasing while neighbouring suburbs increase.
  • Identify suburbs where metric is high but infrastructure improvements pending.
  • Focus on properties where DOM is high due to presentation not location.

You Can:

• • Compare the metric across different price points to identify value opportunities.
  • Track these patterns in gentrifying areas vs established suburbs.
  • Monitor trends in infrastructure growth corridors.

Reno and Flip Strategy Applications

Understanding Time Frames

You can use this metric in Reno and Flipping strategies to identify and set Project Timelines and selling periods.

• Use average DOM to set realistic project completion dates and “paydays” to settlements. Plan for your property taking longer to sell than the average time in your market. A good rule of thumb is to budget for an extra 30 days of holding costs as a safety buffer. For example, if properties typically sell in 45 days, budget for 75 days of holding costs to be safe. Remember: even after you find a buyer, settlement typically takes another 30-42 days – so you’ll need to cover holding costs during this period too!

• • Build buffer periods based on seasonal patterns. Knowing whether there is an average 30 day sale period in the summer or a 90 sale period in the winter when you project is forecast to be completed, on the market and settled.
  • Factor in variations by property type and price point.

You can use this metric to mitigate some risk management by:

• • Calculate holding cost buffers based on DOM + 30 days extra.
  • Adjust renovation scope based on expected selling time.
  • Plan completion dates to align with low metric seasons – so selling in best peak of the sales season.

Calculating Holding Costs

Project Costings Framework can be calculated by using the following statistics.

• • Base holding cost calculation = (Average DOM + renovation time) × daily holding cost
  • Risk-adjusted model: (Average DOM x 1.5) × daily holding cost.
  • Seasonal adjustment: Add 30 days for off-season sales.

Every 30 days of addition time on the market typically reduces profit by 1-2%. Strategic timing can save 2-3 months of holding costs.

Influencing Renovation Decisions

You can adjust the scope and focus of your renovations accordingly:

• • High DOM market: Focus on distinctive features to stand out.
  • Low DOM market: Quick, cosmetic updates sufficient
  • Target renovations that reduce future DOM

Renovation Priority Framework:

• • For High impact, low DOM improvements focus on:
    • Street appeal upgrades
    • Modern kitchen/bathroom refreshes
    • Neutral colour schemes
  • If you want DOM reduction features, focus on:
    • Energy efficiency upgrades
    • Home office spaces
    • Indoor/outdoor flow
    • Smart home technology

Development Strategy Applications

Market Appetite Assessment

To analyse demand in the market when sourcing a project, compare across different property types:

• • Apartments vs houses
  • Different bedroom configurations
  • Price points and target markets

You will want to look for these +/- market signals:

• • Rising in comparable properties = potential oversupply
  • Stable/falling = market absorption capacity
  • variations by property type indicate buyer preferences.

Project Launch Timing

You can optimize the project launch window by reviewing:

• • Seasonal patterns to guide launch timing.
  • School calendar impacts on family buyer (target market impact)
  • Local market event alignment (infrastructure completion, retail openings)

Strategic planning around and for the launch of a project can be actioned by:

• • Pre-launch marketing duration based on current trends.
  • Stage releases based on absorption rates in the market base on this metric.
  • Price point adjustment 

You can really go granular when monitoring for strategic reasons. Depending on your strategy and focus for recording, here’s some suggested action steps to set up a Monitoring System

• Track metric trends weekly and focus your monitoring on
  • Property type
  • Price point
  • Location
  • Property features
• Set up alerts for properties hitting thresholds.

Decision Making Metrics – Primary indicators include.

•  trends (increasing/decreasing),
• variance from market average and
• seasonal patterns

Action Triggers to consider and then take action around:

• more than 60 days: Initial negotiation opportunity
• more than 90 days: Aggressive negotiation window
• trend reversal: Market cycle indicator
• variance more than 20%: Market inefficiency signal

Strategy Assessment and Adjustment can be monitored through:

• Regular strategy review based on trends.
• Quarterly market cycle assessment
• Annual strategy alignment check
• Continuous monitoring of impact on returns

7. What Resources Can You Use to Find DOM Data?

• CoreLogic Property Value: corelogic.com.au/products/property-value
• Domain Research: domain.com.au/research
• Real Estate Institute of Australia: reia.asn.au/market-data
• SQM Research: sqmresearch.com.au/market-data
• Property Value by CoreLogic: propertyvalue.com.au
• REA Insights: rea-group.com/rea-insights
• Local Real Estate Portals:

• • realestate.com.au/insights
  • domain.com.au/property-profile
  • onthehouse.com.au/market-data

8. Most Common Mistakes When Using Days On Market

Not Considering Seasonal Variations

• Property market analysis should account for typical seasonal patterns.
• be aware of comparing year-over-year rather than month-to-month 

Ignoring Property Type Differences

• Different property types have different typical DOM.
• Compare like-with-like for accurate analysis.

Not Accounting for Relisting

• Some properties are relisted to reset DOM.
• Need to track cumulative DOM for accuracy.

Missing Market Context

• DOM alone doesn’t tell the whole story.
• Must consider alongside other metrics.

Examples of Days On Market in Action

Case Study 1: Market Timing Success

A Sydney investor noticed average DOM in a specific suburb increasing from 30 to 45 days while prices remained relatively stable. Deeper analysis revealed:

The Strategy:

• Tracked 6 months of trends showing steady increase.
• Monitored price changes of sold properties.
• Analysed vendor discount rates increasing from 2% to 4%.
• Identified properties listed over 60 days.

The Action:

1. Created a list of properties listed over 60 days.
2. Researched seller motivations through agent conversations
3. Found a property listed for 68 days with an interstate seller.
4. Used data to demonstrate market slowdown to seller.
5. Presented data showing increased holding costs.
6. Negotiated 7% discount ($56,000 on $800,000 property)

The Outcome:

• Purchased below market value.
• Saved on stamp duty due to lower purchase price.
• Property rented quickly due to realistic pricing.
• Achieved 5.2% rental yield versus suburb average of 4.7%.

Case Study 2: Development Strategy

A Brisbane developer used trends to optimize their project launch timing and strategy.

The Analysis:

• Tracked for comparable properties over 12 months.
• Monitored new project launches in area.
• Analysed price points of fastest selling properties.
• Studied seasonal buying patterns.

The Strategy:

1. Timed launch for February (post-holiday buying season)
2. Priced properties within “sweet spot” range identified through DOM analysis.
3. Created targeted marketing campaign based on buyer demographics of quick sales.
4. Staged release strategy based on the metric patterns.

The Outcome:

• Achieved 75% pre-sales within one month.
• Secured project funding at better terms.
• Reduced marketing costs due to quick sales
• Generated waiting list for future stages

9. Related Days On Market Metrics

Interconnections and Significance

DOM connects with several other metrics, each relationship providing unique insights:

Auction Clearance Rates Relationship:

• Inverse correlation: High clearance rates = Lower DOM
• Indicates market strength/weakness.

Watch for:

• falling clearance rates but stable DOM might indicate pricing issues.
• Fewer properties selling at auction/during first marketing period.
• Time to sell remains consistent for properties that do sell.
• Suggests price expectations gap between buyers and sellers.

Opportunities:

• Focus on properties that failed at auction but need to sell.
• Look for sellers who tested the market with aggressive pricing.
• Target properties where sellers used auctions to “test” the market.
• Identify sellers who need to align with market quickly (e.g., already purchased elsewhere)

Action Items:

• Build database of failed auctions
• Track properties transitioning from auction to private treaty.
• Monitor price adjustments post-failed auction.

Stock on Market Relationship:

Direct correlation:

• Higher stock levels often mean longer DOM.
• Helps understand supply/demand balance.

Watch for:

• Seasonal patterns affecting both metrics – Regular fluctuations in DOM across seasons with seasonal buyer preferences which would look like predictable patterns in listing volumes.
• New development impacts (increase of development stock on the market could influence the stock on market which could influence the DOM).

Opportunities:

• Counter-cyclical purchasing when seasonally high.
• Target off-season properties (e.g., family homes in winter)
• Leverage seasonal patterns for different property types.
• Capitalize on end-of-season motivated sellers.

Action to take:

• Create seasonal buying calendars by property type.
• Track year-over-year seasonal patterns.
• Build relationships with agents for off-season opportunities.

Property Values/Price Changes Relationship:

• Longer DOM often precedes price reductions.
• Rapid lower metrics often accompanies price growth.

Watch for:

• Early warning signs of market changes
  • Price adjustment patterns based on ranges.
  • Predictable discount patterns based on DOM.
  • Different adjustment behaviours across price points
  • Varying seller motivation levels

Opportunities by Range:

• 0-30 days: Limited opportunity, focus on desperate sellers.
• 31-60 days: First significant adjustments, identify motivated sellers.
• 61-90 days: Major reassessment point, maximum negotiation potential
• 90+ days: Potential for deep discounts but check for property issues.

Actions to Take

• Create DOM-based tracking system.
• Build database of typical adjustment patterns
• Develop relationship with agents managing aging listings.

10. Market Cycle Behaviour

DOM behaviour varies across market cycles:

Growth Phase can be indicated by:

• Shorter DOM (typically under 30 days)
• Quick sales with multiple offers
• Limited negotiation opportunity

Peak Market turning can be recognised as:

• DOM begins to extend.
• More properties listed.
• Buyer selectivity increases

Declining Market by recognising:

• Longer DOM (90+ days common)
• Increased vendor discounting
• Strong buyer negotiation position

Recovery Phase can look like:

• DOM gradually decreasing.
• Market activity increasing
• Opportunity window closing

11. Overall Action Steps for Days On Market Analysis

Data Tracking and Process Development

• Build a monitoring system.
• Track price adjustment patterns.
• Create standard analysis templates.
• Develop opportunity scoring system (I go with the “traffic light system – red, orange, green, could do 1-5 score)
• Build tracking system for market patterns.
• Monitor seasonal trends.

Relationship Building:

• Create investor network for opportunity sharing.
• Develop agent network for aging listings.
• Build seller direct communication channels (i.e. – Letters direct to the homeowner)

DOM stands as a fundamental metric in property market analysis, providing crucial insights for investment decisions. By understanding and correctly interpreting DOM alongside other metrics, investors can make more informed decisions and improve their investment outcomes.

In this post we covered an indepth look at how DOM interacts within the property market and can influence your decisions when it comes to buying an investment property or a home.