- Knowing what data is available.
- Where to find it.
- How to interpret it.
- How it helps pinpoint the next hotspot.
As a result, most property investors:
- Feel research is overwhelming.
- Rely on often biased ‘expert’ opinion on where to buy.
- Get stuck with ‘analysis paralysis’.
- Buy what they hope will make a good investment.
- Buy the wrong property.
- …and overpay.
- Or worse…do nothing at all.
What Is The DSR Score?
The DSR is important as it indicates a suburb’s likelihood of achieving capital growth in the near term, i.e. whether it will be a good investment.
Choosing from 350,000 properties in 15,000 suburbs is daunting for any investor. The DSR has pinpointed the top 33% of property hotspots with 96% accuracy, based on the gap in supply and demand, making it entirely possible to build a capital growth funded property portfolio.
Register below for FREE access to our acclaimed research technology, hotspot reports and investment alerts:
DSR Score Booklet
Comprising nine articles published over nine months in YIP magazine, each component of the DSR Score (and their practical application for investors and property industry experts) is covered in this hugely popular 46-page research booklet.
Time the Market
Timing the property market becomes easier when you have all the facts, data and the expertise to analyse and draw accurate conclusions. Our free hotspot reports, data and workshops make property research a breeze for any level of investor.
Save hundreds of hours searching for your next investment property. Get early access to properties scoring highly on our unbiased and objective Property Selection Index. Buy with the backing of Australia’s most innovative property research technologists and investment property consultants.
How Does It Work?
DSR Score In The Media
The DSR Score features in over 24 magazine articles dedicated to our data and research. It’s appeared on 3 magazine covers and the data section of YIP and API magazine.
There are eight recognised property statistics available from many different Internet sources. Individually they are either an indication of the demand from tenants and owner-occupier buyers for property in the area or the available stock on market to meet this demand.
When viewed together, as a whole, these eight statistics are highly predictive of future price movements in the area as a result of the gap in supply and demand or the Demand to Supply Ratio (DSR). This gap in supply and demand is represented by a single number or score called the DSR Score.
The DSR ranks a suburb between 0 and 48 based on how it measures against each of the eight statistics (so 8 statistics x a maximum score of 6 for each statistic = 48, which is the maximum overall score). The DSR score is useful for ranking suburbs for easier selection.
- 48 suggests a suburb with a high probability of imminent capital growth.
- 24 is a suburb in theoretical balance.
- 0 is a suburb with a high chance of price decline due to over supply relative to demand.
The 8 Stats Behind the DSR BoomScore™…
Move your cursor over each stat
to discover the power behind the
The ‘stats wheel’ describes each supply and demand statistic behind the summary DSR BoomScore™.
Renters vs Owner-Occupiers
This is the proportion of renters to owner-occupiers that live in a suburb.
The lower this figure, the less supply of rentable accommodation there is. Owner-occupiers tend to take better care of their properties than tenants and are usually of a higher income demographic.
Online Search Interest
This is the ratio of people searching for property online to the number of properties for sale.
The higher this figure, the more demand for property compared to supply for would-be buyers searching online.
Days On Market
This is the number of days a property has been listed for sale.
The lower this figure, the more quickly property is snapped up by buyers, showing high demand.
This is the percentage difference between the original asking price requested by the seller and the eventual sale price agreed by the buyer.
The lower this figure, the more demand there is since sellers don’t need to be as open to negotiation in order to get their property sold.
Stock On Market
This is the number of properties for sale as a percentage of properties in the area.
The lower this figure, the lower the supply of property or the more demand for it, or both.
This is the percentage of properties that are vacant.
The lower this figure, the lower the supply of rentable accommodation or the higher the demand for it, or both.
The percentage of rental income to property value.
The higher this figure, the more demand there is from renters to live in the location.
Auction Clearance Rate
The percentage of auctioned properties that actually sell.
The higher this figure, the more demand there is from buyers since fewer properties are passed in.
- The more sources of data the more accurate the conclusions that can be drawn.
- Data that has historically shown itself of a higher quality is given more credit or weight in calculations.
- Unrealistic figures are either removed completely or given lower SR weighting.
- Statistics that have volatile changes from month to month are relied upon less than those showing consistency.
No other research tool aggregates the best property data across the web AND scores it for accuracy or ‘statistical reliability’.
Is the DSR Score Accurate?
Whilst we do not advocate relying on the DSR solely for an investment decision it is undoubtedly one of the smartest technologies available for comparing 15,000 suburbs against established and objective benchmarks.
An additional layer of certainty is provided via our data statistical reliability scoring and cleansing process.
The data for each suburb is assessed for its statistical reliability (SR) before being included in the available suburb research results. Any suburb not meeting a certain SR minimum is excluded from the final monthly DSR Score availability for all 15,000 Australian suburbs.
The Statistical Reliability (SR) is a measure of how reliable the DSR for a market is. Not all data is available every month especially in thinly traded markets. So for example a suburb with a 100% Auction Clearance Rate in June suggests there is high demand based on that particular result. But what if there was only one auction in a market with only 10 properties? The SR would be very low and the suburb most likely excluded entirely.
Is the DSR Score Important?
Is capital growth and rental yield important? Of course it is but few people know how to find the best combination of growth and yield. The DSR Score makes it easy to find and compare suburbs that closely match your investment goals without trawling the Internet for hours spending a fortune on research reports.
All successful property investors build self-funding property portfolios using equity from capital growth.
They fund the holding costs with high rental yields.
A combination of strong growth and rental yields makes it easier to build wealth without sacrificing life’s financial needs along the way.
We only buy a few properties in our lifetime. Surely picking the best market by how well they measure against ALL the well-known capital growth indicators is vital? Boomtown and the DSR Score makes a very complex research process amazingly easy for any level of investor.
Frequently Asked Questions
The DSR score measures the gap in supply and demand for units and houses in an area.
The higher the score the better the chances of imminent capital growth.
The DSR Score compares 15,000 suburbs against eight leading supply-demand indicators:
• Rental Vacancy
• Days on Market
• Stock on Market
• Vendor Discount
• Rental Yields
• Auction Clearance Rate
• Proportion of Renters to Owners-Occupiers
• Online Search Interest
Each suburb is given a summary score between 0 and 48 with 24 representing a market in theoretical balance, i.e. where supply meets demand.
Investors are encouraged to search for suburbs with a score of 30 to 40 for an optimum mix of growing demand and some restriction in supply.
The DSR Score can provide a snapshot of a suburb’s statistical credentials or help investors cherry-pick a shortlist of potential suburb hotspots based on their personal requirements.
DSR Suburb Score Summary
DSR score 0 – 8 is Very Poor
Buyers are disinterested. For sale signs are gathering dust. There is very little interest from would-be buyers in this over-supplied suburb. Sellers are desperate to make a sale but few do. Buyers can negotiate ruthlessly and still get what they want. Bargains can be found but expect negative capital growth in the immediate future.
DSR score 9 – 16 is Poor
Buyers are few and hesitant while sellers are keen to offer them incentives. There is some interest from buyers but there are few of them and they can afford to be choosey. Sellers are happy if they get an ordinary offer and are often prepared to accept inconvenient terms just to get a sale. Prices will remain flat if they don’t drop.
DSR score 17 – 24 is Below Average
It’s better to be a buyer in this suburb. Sellers need to be realistic. Supply only just outweighs demand. Buyers can afford to ignore sellers who aren’t negotiable. Sellers will have to wait to get the price they want. There is little driving capital growth so expect prices to remain flat or increase a little slower than the national average.
DSR score 25 – 32 is Above Average
Sellers are in no panic and buyers are making decent offers. This is a healthy market. Demand is ahead of supply but not alarmingly. Buyers are unable to get away with low-ball offers. Sellers are getting the prices they ask for more often than not. Expect growth to marginally exceed the national average.
DSR score 33 – 40 is Good
This is a sellers market. Buyers will need to move quickly. There is strong demand from buyers yet not enough properties to give them time to be choosey. Sellers don’t have long to wait before they receive a healthy offer. Prices are being driven upward. Expect good capital growth in the immediate future.
DSR score 41-48 is Very Good
Buyers are desperate and sellers are licking their lips. Properties in this suburb are highly desired by buyers but there are very few available. They have to act fast and make strong offers to get their foot in the door. The few sellers are receiving many strong offers. The imbalance of demand and supply will drive prices in the suburb higher at a fast rate.
The score is also useful for sorting the thousands of suburbs you might want to consider from highest to lowest DSR. You should be looking mostly ‘in-between’ as too high a score means bargains won’t be available but also a low score means you might pay less but not enjoy a good investment return. Make sure you read our YIP magazine 9 part series on the DSR Score. It’s available in one downloadable booklet.
Data that has historically shown itself of a higher quality should be given more credit or weight in calculations. Unrealistic figures should be either weeded out completely or at least given lower credibility.
The higher the score the higher the reliability. 8 is the highest. There are 15,000 suburbs in Australia (approx) but on any given month we update the DSR score for every suburb keeping only about 7,000 to 10,000 of the suburbs behind in Boomtown. The reason being is we throw out those that are simply not worth looking at due to very poor statistical reliability (or poor data). So if the suburb does not appear in the Boomtown drop down list or Hotspot Finder results, then you probably want to avoid it (or sell).
Statistics that have volatile changes from month to month should not be relied upon as much as those showing consistency.
The DSR Score is a single number indicating capital growth potential. We recently tested how our top 100 suburbs in 2010 compared with the market average. The result was phenomenal. Our suburbs averaged 11.7% when the market average was in negative growth. It’s up to you then to drill down even further into the data behind the score and the unique suburb factors outside the score. The DSR Score is a great start.