The PROPERTY DOCTORS, Sydney Australia Novak Properties
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The PROPERTY DOCTORS, Sydney Australia Novak Properties
EP. 1413 THE MAGIC NUMBER THAT DIAGNOSES THE PROPERTY MARKET
Want to know the secret temperature gauge real estate professionals actually use? Forget auction clearance rates - they're inconsistently reported and can vary by up to 15% between data providers. The true insider metric is total property stock levels, and it's the most reliable indicator of whether you're in a buyer's or seller's market.
This episode unveils how property professionals track market conditions using this hidden number to advise clients confidently. We explain why stock levels are the definitive market temperature gauge and exactly how to find them yourself through property portals. The process is surprisingly simple but not immediately obvious - we provide step-by-step instructions for uncovering this valuable data on realestate.com.au's desktop version.
We break down what the numbers mean: when stock levels drop below 500 properties in an area like the Northern Beaches, you're firmly in a seller's market with rapid price growth, minimal discounting, and competitive conditions. When levels exceed 1,000, the power shifts dramatically to buyers who gain choice, time, and negotiating leverage. We reveal how the Northern Beaches market has fluctuated from 449 properties in December to 875 in February, then down 22% to 682 in May - crucial context for anyone buying or selling in this market.
Track this number in your local area over time, and you'll gain the same insider perspective professionals use to guide clients through changing market conditions. It's the unbiased metric that doesn't lie, providing clarity when media reports and auction data send mixed signals about where the market truly stands.
people are always asking us real estate agents about the weather, the temperature of the property market. There's one metric, there's one number we always use as the bible stay tuned, we're, I'm the ringleader.
Speaker 2:So what's up? Morning Property Doctor.
Speaker 1:Morning, Billy Drury. Old man, young man stuck in an old man's body.
Speaker 2:Thank you for the introduction.
Speaker 1:Old man, young man stuck in an old man's body. You for the introduction. Old man, young man stuck in old man's body. Yeah, yeah, no other way around how?
Speaker 2:are you I'm I'm brilliant. I'm excited to share this. I think this goes over the top of a lot of people's head. You know, blissfully unaware. They are always hearing. You know numbers reported in the which reflects how the market's performing. I'll give you an example Auction clearance rates always seem to come top of headline and there's a couple of inconsistencies there. So we're going to talk about what the true metric is this morning and a number that we closely follow every week to bring insight to buyers and sellers when they ask how is the market going, particularly for the Northern Beaches? I don't know. I'd love to hear the input of other agents, but I think what we're going to talk about this morning is super, super relevant for the Northern Beaches.
Speaker 1:Absolutely. And look if you are in any sub-district precinct, which everyone is. We're going to show you how that works through your software. And, believe it or not, it's actually not an easy number to find realestatecom domain RP data. All the professional pool websites don't actually have this metric so it's actually easily found. So we're gonna teach you that. And it comes back to it's a seller's market or it's a buyer's market. Now there is also the nice word saying it's a balanced market. It's in between the two. Sometimes I find that some just used to be polite. But when it's a seller's market, that's when it's crazy capital growth 10, 20 a year up just in a year, uh. And that's when buyers are having a super hard time at auctions uh, clearance rates are super fast in auctions. When it's a buyer's market, tell us about that, bill yeah, you've got choice.
Speaker 2:Sometimes you've got time. Yeah, you've got choice. Sometimes you've got time to make decisions and there's stock that's sitting on the market and when properties are not selling quickly and they're sitting, they appear to be overpriced. That's what the general market is telling us. Ultimately, you know, there's a good saying if it was half price would it sell? I think Glenn Hicks came up with that one. It all comes back down to price and buyer sentiment. So I don't know if it can ever be exactly 50-50 balanced. I think that's near impossible. It can certainly feel like it, but generally it's swinging one way or the other. Yeah yeah.
Speaker 1:Now another thing which this is not the number that we're getting to, but another thing that is an indicator across this is price discounting. Um, when it's a a seller's market, there's generally no vendor discounting. It's generally always chipping at the price or over the price. That's how aggressive on fire the market is have to send that the wall by the way. And then and then, as a buyers market, there's always the price is going down. The price is going down and the properties, from when they first come online, are staying on the market. Maybe 60 days, 90 days, 100 days. There's an average in the marketplace of probably I remember in the marketplace the average days on market was 114 days and that was the average days on market for DY. That's definitely a buyer's market.
Speaker 1:Now, to indicate these markets the last time I saw a real surge in the in the market was probably 2022 23. That's when we saw a lot of capital growth. I remember 19. I remember there was one I don't remember, but in the mid 80s there was two. It surged double in a year or two and then five years later, it went double in a year or two Again. On top of that, and then we saw some really nice capital growth times post-GFC. So generally, the markets across Sydney, the healthy markets across Sydney, you will see double capital growth in 10 years. But sometimes it happens much shorter, sometimes longer. Billy, what's the magic number and can you teach us how to look out for this number please?
Speaker 2:Yes, we're talking about stock levels. As Mark said, it's sometimes hard to find what the true number is, but we are referring to the largest property portal in the country, realestatecom. Go on their website. Now it's important you're using the desktop version, not the mobile phone app, because it won't allow you to do this, but you put in your area and this can be a suburb, it can be broader, something like northern beaches, hit search, and now it's really important that you follow these couple of steps. So pull this over so you can see at the top here it's showing one of 712, as it reports. That's not the true number. What you need to do is make sure that, first of all, you don't have this button ticked. Not including surrounding suburbs.
Speaker 1:It might creep into non-relevant suburbs very easily yeah yeah.
Speaker 2:Then you go into the map and you'll see a different number reported at the top. That is the number of properties for sale in the area you've searched for. You can see the bold outline all the way around. This is the metric we follow as a real estate agent to gauge what what the market's doing, and particularly for an area where it's supply and demand. I think you can say that's for the majority of the East Coast. It's never going to be about trying to fill the properties with people. Everyone wants to live there. It's just supply and demand. And what's the sentiment at the time?
Speaker 1:um, that's reflected in prices so we've got about 40 suburbs in the northern beaches. But in realestatecom when you write northern beaches on the top, it aggregates all of those suburbs into that one report. Now if you're depending on your locale, um, what I would encourage you to do is see where how real estatecom has aggregated all your suburbs. The aggregated number is better than the suburb number sometimes. Sometimes suburbs are known for units or they're known for luxury houses, so that's always going to muck around with your numbers there. But if you actually grab your whole locality or your whole council precinct, like I would imagine, there would be North Shore, there'd be an Upper North Shore grab and then there'd be a Lower North Shore, separate grab. Grab all of those numbers.
Speaker 1:Now we quote this like hell to prospective purchasers, to prospective vendors, because they all have their experience from what they see in mainstream media and what they see on realestatecom. Something I should say is sometimes realestatecom dominates areas. So Northern Beaches, realestatecom dominates. So that's the metric we use. Eastern Suburbs, domaincomau dominates would be using that for your metrics. But either or the magic is in when you start tracking the numbers over time. So when we look at our realestatecom, what's a high number bill for real that you've seen on realestatecom, then I'll tell you what I've seen on realestatecom.
Speaker 2:Well, I've been following it since the start of the year. So 31st of december, just before uh, the new year kicked in, I checked there were uh 400, and so I'm just going back to my notes so I'll get it right there were 449 properties on the market. Now that's consistent. Every year it's always going to be at its lowest because you've got the holiday period Christmas, people are not doing anything and they're getting ready for the new year launch. So that's pretty consistent.
Speaker 2:From the 31st of December to the 24th of February we found that went from $449 to $875. So to put that in a percentage metric, it's just under double 94%. What was quite unusual then is from the 24th of February to the 5th of May, there weren't really much property. There was not really any property coming to market, so it dipped 22% and that's where we're at now. So it went from 875 to 682. This morning we're down, there's less stock on the market and it usually comes off a little bit as we sort of dip into um, you know, off the top of the new year launch, but it's it's surprisingly low for this time of year now to give you some a longer, a longer lead.
Speaker 1:I've seen 1200 properties on realestatecom. Billy just said 600 odd properties for right now, but a buyer's market where it's a tough market to sell a property a great, an easy time to buy a property. A buyer's market, um sits. If you're over a thousand properties and I believe you, you're clearly in a buyer's market, and I think if you're over a thousand properties, and I believe you're clearly in a buyer's market, and I think if you're under 500 properties in normal periods, then yeah, you're basically clearly a seller's market. You're going to be doing well. So, guys and girls, what I encourage you to do if you want to become an expert in your area, go onto your main portal, have a look how many properties are on the market. Don't forget what Billy told you to do Make sure you exclude surrounding suburbs, because when we're in the northern beaches, if we include surrounding suburbs, we'll get silly suburbs, like Chatswood, popping in which are not relevant. So just keep an eye on doing that for sure.
Speaker 2:And this is the better number to follow because there is inconsistencies. Auction clearance rates is the number one metric that gets reported, but as an example, corelogic, which is RP data, aggregates all the portals. There was a preliminary clearance rate of 69.4% based on 577 scheduled auctions for the weekend that's just gone. Realestatecom reported 54% clearance rate for New South Wales based on their auctions 728. So that number, it's such a wide gap you just don't know what truth's being reported, and the reason for that is agents are not updating those records, they're not reporting them as sold or properties are selling before auction. So this is the better number followed. No one lies guys.
Speaker 1:Keep an eye out on total properties on the market in your suburb on your portal. That will give you good optics on what is a uh, if it's a buyer's market as a seller's market. But you sort of got a trend, watch it. Watch that trend, maybe quarterly or monthly, and then it'll start to speak volumes for you as a buyer or as an agent. We've been tracking this on the market for probably 12 years now. We've actually got a whatsapp group in our mean telling ourselves and we're constantly reporting to each other the numbers every couple of weeks, every week or two. But that's the magic metric. Hopefully that helped you today.
Speaker 2:There you go. Have a good day.
Speaker 1:Thanks, billy Bob. See you, bye.