Ignoring Days on Market? Here’s Why You’re Missing Investment Opportunities

Property investment is all about timing, and Days on Market (DOM) is one of the most valuable yet often overlooked metrics for determining the right time to enter a suburb. By understanding what DOM represents, how it reflects buyer demand, and what it signals about future capital growth, investors can make smarter decisions about where to buy and when.

A suburb’s DOM is a real-time indicator of market conditions. It reveals whether an area is experiencing high demand and fast property turnover, or if listings are lingering due to low buyer interest or oversupply. Tracking DOM over time and comparing it with other property data allows investors to spot emerging hotspots before prices rise significantly.

This guide explores what DOM means, why it matters, and how to use it to assess a suburb’s investment potential. We’ll also examine case studies of suburbs where falling DOM signalled strong price growth.

What Is Days on Market (DOM) and Why Does It Matter?

Days on Market (DOM) refers to the average number of days a property remains listed before it is sold. It is one of the most reliable indicators of buyer demand and market speed.

A low DOM suggests that properties are selling quickly, often due to heightened demand and limited stock. A high DOM, on the other hand, may indicate a slower market, where properties take longer to sell due to weaker demand or oversupply.

Why Should Property Investors Pay Attention to DOM?

For investors, understanding DOM is crucial for several reasons:

1. It Reflects Buyer Demand – When properties sell quickly, it usually means buyers are actively competing, often leading to price increases.
2. It Helps Identify Market Phases – A rising DOM may indicate a market cooling down, while a falling DOM suggests a suburb is heating up.
3. It Predicts Price Growth – Suburbs with a declining DOM and increasing sales volumes often experience price growth in the following months.
4. It Guides Entry Timing – Investors who track falling DOM in an area before prices surge can enter the market early and maximise capital gains.

For example, if a suburb’s DOM falls from 60 days to 30 days over six months, it signals increasing buyer demand. If prices have not yet risen significantly, investors have an opportunity to buy before the market takes off.

How DOM Correlates with Buyer Demand and Market Speed

DOM provides key insights into supply and demand dynamics. When combined with other metrics like stock on market, median price growth, and vacancy rates, it offers a comprehensive view of a suburb’s investment potential.

1. Low DOM = High Buyer Demand

A low DOM indicates that properties in a suburb are selling quickly, often due to:

• Increased interest from homebuyers and investors.
• Low stock levels, creating competition among buyers.
• Positive economic or infrastructure developments driving demand.

For instance, if a suburb’s DOM is consistently below 30 days, it signals that properties are in high demand. Investors buying in such areas before price growth accelerates can see strong returns.

2. High DOM = Weak Demand or Oversupply

A suburb with a rising or consistently high DOM may be experiencing:

• Weakened buyer confidence due to economic uncertainty.
• An oversupply of properties, leading to reduced competition among buyers.
• Fewer lifestyle, employment, or infrastructure attractions compared to other areas.

For example, if a suburb’s DOM increases from 45 days to 80 days in a year, it may suggest a slowing market, making it less attractive for investors seeking short-term capital growth.

3. Falling DOM with Rising Prices = Strong Capital Growth Potential

One of the strongest buy signals for property investors is when a suburb experiences shrinking DOM alongside increasing median prices. This trend suggests:

• Buyers are moving quickly to secure properties, reducing listing times.
• More competition is pushing prices up as stock levels tighten.
• Demand is outpacing supply, leading to long-term capital growth.

If a suburb’s DOM drops from 50 days to 25 days over 12 months, and median prices rise by 6%, it signals a high-growth phase, making it an ideal time to invest.

How to Use DOM to Identify Investment Opportunities

To get the most out of DOM, investors should compare it with other property data, such as:

• Stock on Market Percentage – If both DOM and stock levels are declining, it signals a tight market with rising demand.
• Vacancy Rates – If DOM is falling while rental vacancy rates remain low, it means both investors and tenants are competing for properties.
• Sales Volume Trends – A suburb with decreasing DOM and rising sales volumes is experiencing growing demand, making it a strong investment location.

Case Studies of Suburbs with Low DOM and Rising Prices

Case Study 1: High Buyer Demand in a Growth Corridor

A mid-tier suburb saw a sharp drop in DOM over 12 months:

• DOM reduced from 55 days to 27 days.
• Sales volume increased by 30% year-on-year.
• Median house prices rose by 8.5%.

This suburb was benefiting from major infrastructure projects and increased migration, leading to higher demand and rising property values.

Case Study 2: A Coastal Suburb Attracting Investors

A previously slow-moving coastal suburb saw buyer activity surge, resulting in:

• DOM declining from 75 days to 32 days over 18 months.
• Property sales increasing by 40%.
• House prices rising by 9% annually.

With lifestyle appeal and improved accessibility driving interest, early investors capitalised on strong price growth.

Case Study 3: A Gentrifying Inner-City Suburb

An inner-city suburb undergoing gentrification saw:

• DOM fall from 48 days to 19 days within a year.
• Apartment prices rise by 12% over two years.
• Sales volumes double as young professionals moved in.

With new restaurants, retail precincts, and improved public transport, the suburb became a high-demand location, pushing property prices higher.

How to Apply DOM Analysis in Investment Decisions

To effectively use DOM in property research:

1. Monitor DOM Trends Over Time – A consistently declining DOM suggests rising demand, while a sudden increase may indicate a cooling market.
2. Compare DOM Across Neighbouring Suburbs – If a nearby area has a lower DOM but similar property prices, it may be a better investment option.
3. Check DOM for Different Property Types – Houses and apartments may have different DOM trends, impacting investment strategy.
4. Use DOM Alongside Other Market Indicators – Analysing stock levels, median price growth, and sales volumes gives a more accurate picture of market trends.

For example, an investor choosing between two suburbs might find:

• Suburb A: DOM declining from 50 to 25 days, median prices up 6% per year, rental vacancy at 1.8%.
• Suburb B: DOM steady at 60 days, median prices up only 2%, rental vacancy at 3.5%.

Suburb A would present a stronger investment opportunity due to rising demand and tightening supply.

DOM is more than just a statistic—it’s a key indicator of market momentum and future price growth. By tracking DOM trends and combining them with sales volumes, stock levels, and vacancy rates, investors can make informed, data-driven decisions.

A falling DOM, combined with rising median prices, signals a suburb is moving into a high-growth phase. Investors who recognise this pattern early can secure properties before competition drives prices higher, maximising capital gains.

By applying DOM analysis strategically, investors can stay ahead of market trends and make smarter, more profitable investment choices.