How do you know the best time to sell your property? It’s easy to monitor the market with this free tool.
The property market goes up and down all the time. So how do you know when’s the best time to sell your property? Luckily, there’s a tool out there to help you assess the market on an ongoing basis to understand the trends in your current suburb and whether or not you should think about getting out and selling your property before the market goes down or before it plateaus.
To do this, we’re going to use a tool called DSR Data, which stands for Demand to Supply Ratio and you can get this over at dsrdata.com.au. This is a really great tool and it gathers a lot of different information from around the internet; different sources to try and assess how much demand is there for properties in the area compared to the supply of properties in the area. And so, ideally, you don’t want to sell when the DSR is extremely high because this means that you’re likely going to get some growth in the future. However, when the DSR starts decreasing, then you want to think about selling.
Let’s go ahead and look at a suburb where I used to live called Cronulla. So, I’m going to put in “Cronulla” for units and we can see – it will come up in a second – that the DSR for Cronulla is – I think it’s 74 out of 100. There we go, 74 out of 100. Now, if the DSR is 50 out of 100, that theoretically means that the market is balanced, so there is equal demand and equal supply. If it’s below 50, that means that there’s more supply than demand, which is not a great situation. And if it’s above 50, and the higher above 50 it is, means the more demand there is for the area.
So if we go ahead and create an account and login, which is absolutely free. What we can do is we can actually Market Monitor. So if you own a property in an area, we can setup monitors for your area and you can get emailed every time something happens in your area that you want to be aware of. And I’ll show you through this, but this is really cool because you can say, okay, the DSR data of my area is “X”, notify me when it drops below that. So, let’s go ahead and we’ll put in Cronulla in New South Wales here.
So we’re going to go ahead and click Cronulla for units and then click on Add Market. Now, we can select statistics and get notifications when these statistics change. So the first one that I want to monitor is the DSR itself because that pulls from a lot of information. It’s a really great reference point. So, here’s the demand to supply ratio.
If I click on the Context, then I can see we’re currently at 74, which is very heavily in the green. Basically, we can see Australian average of 59 here. So let’s say I want to be notified when the DSR falls below 70. We can look at the history of the DSR here as well. We can see that the DSR has traditionally been quite good, but then has been above 70 recently. So, when it falls below 70, I want to be notified. Another thing that I want to be notified of in this case is the Average Vendor Discount.
If we look at the history of the Average Vendor Discount, we can see it’s usually around the 4%-5%. Then, went up to between 5% and 6% and then dropped dramatically recently. But, a few months ago, it was actually negative and it now seems to be going up. So I want to get notified if it goes above 2%. So, if it rises above 2, then I want to go ahead and be notified. So, send me an alert whenever any of the above is true and alert me via email.
If I go ahead and click Save, I’m now monitoring this suburb and whenever the DSR changes and drops below 70 or if the Average Vendor Discount goes above 2%, then I can know, okay, something’s happening in this suburb. I can then do more research to understand, is now the best time to sell? There’s other data that you can look into, so let’s go ahead and put Cronulla in again, we’ve already got that market, so let’s go ahead and choose another one. Moree. If we click Add Market, we can look at Auction Clearance Rates.
We can look at Days on Market. The Demand to Supply Ratio. We can also look at Online Search Interest, Percentage of Renters, Percentage Rent Growth. What else is there under DSR? Percentage Stock on Market. Statistical Reliability and there’s other things, like Typical Value, Vacancy Rates, Growth Rental Yield in the area.
Vacancy Rate, I might monitor. Growth Rental Yield, I wouldn’t. I wouldn’t monitor the Statistical Reliability either. There are some great options in there for DSR+, if you want to go ahead and upgrade to that. So, Demand to Supply Ratio+ could be a good thing to look at. Market Cycle Timing could be a good thing to look at to understand where in the cycle this market is. So, you can monitor a whole bunch of different things, but I think if you’re going to monitor just a few, Demand to Supply Ratio, Average Vendor Discount.
I would also monitor Days on Market and Vacancy Rate. So Days on Market are increasing, that’s a bad sign. As well as your vacancy rates are increasing, that’s a bad sign. So, I’d probably monitor those 4 things to understand the movement in my suburb. I’m going to start to see those getting worse and worse, then I might think, okay, the peak is over. Now may be the best time for me to sell.
It’s impossible to know exactly when the best time to sell is. However, with DSR Data, you can now monitor the market with relative ease and you can know, okay, has the market peaked? What’s going to happen in the future? And we can see that Average Vendor Discount in Cronulla used to be negative and now it’s positive. This doesn’t mean the market in Cronulla is not growing anymore, but it does mean that probably the hype of the Sydney market, the hype of Cronulla has probably passed and we’re coming now into a more stable time. And so, now might be the time to sell or it may have been a few months ago.
I guess, only time will tell. When we look back on this in a year, has Sydney grown a lot? The DSR is still very high, so I will presume that Cronulla will continue to grow for some time. But just that hype that we had during the peak of Sydney, I think maybe we’re through the worst of that. Look, I would just keep monitoring it if I owned a property in Sydney and when DSR starts to fall below what I’m happy with, when it starts to fall below 60, I’d start getting concerned. Definitely, if it fell below 50, I’d be like, okay, something has gone wrong here.
I’d miss my time to sell. You don’t really want to sell in the market where you’re below 50 in terms of demand to supply ratio because you’re going to have bigger discounting. You’re going to have more supply in the market than there is demand.
So, ideally, you want to sell at a time where the demand is still there. You’re not having to discount a lot. You can sell your property quite quickly, but you don’t want to miss out on big chunks of growth that could have occurred. So, it is a balancing act. It is a bit of a guessing game. But, hopefully, now with DSR Data, you’ve got a better way to monitor your market and to know when the best time to sell your property is.
I hope this has been helpful. I’m Ryan from onproperty.com.au. You can check out as we do episodes 3 times a week at the moment over at onproperty.com.au. And if you need help finding a great area to invest in, then we partner with Ben Everingham from Pumped On Property. He’s a buyer’s agent that I absolutely recommend.
If you need help finding a good area to invest in and you want the help of a buyer’s agent, head over to onproperty.com.au/session, S-E-S-S-I-O-N, session and you can get access to a free strategy session with Ben over there to talk through your financial goals and the next steps that you could potentially take.
Thanks for watching, guys, and until next time, stay positive.