June 22, 2025 • 13 mins
Ever wonder why some properties sell for premium prices while seemingly identical ones struggle to find buyers? The answer often lies in a concept real estate professionals call "depth of market" – and it might be the most underappreciated factor in property pricing today.
Depth of market refers to the absorption rate of properties in a specific area – literally how many units a suburb can sell each month. Whether you're a developer planning your next project or a homeowner timing your sale, understanding this concept can have more impact on your bottom line than broader market trends.
Through our memorable "banana analogy," we illustrate why even the most attractive discount won't move excess inventory when demand remains constant. We explore why developers must strategically stage sales across pre-construction, building, and completion phases rather than flooding markets with inventory. For property owners, we reveal why new development projects might actually boost your second-hand property's value by creating a price ceiling and value perception in buyers' minds.
The most fascinating insight? Timing your property sale when similar properties are scarce can net you significantly higher returns – we call this the "banana bump." Just as Rolex masterfully creates artificial scarcity to maintain premium pricing, property sellers can leverage market depth knowledge to maximise returns. Listen now to discover how understanding depth of market could be your key to smarter property decisions and superior financial outcomes.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Guys, discussion off the back of yesterday with
developers.
We deal with all spectrum ofdevelopers big developers,
little developers and oftenwe're educating them on our
market.
Depth of market was a topic wehad yesterday to talk about our
area.
It applies to all areas.
You've got to know what thismeans because it makes you money
(00:21):
.
Depth of market.
Speaker 2 (00:36):
Stay tuned.
Welcome to Morning MinutesMyself, michael Bergio, mark
Novak.
Episode 1454, jamming in thebackground.
Depth of market is the topictoday.
(01:00):
I think it's a really importanttopic and, as Mark said in, and
especially when it comes todevelopers, is the amount of,
let's say, units that suburb cansell each month, month to month
, and where this is veryimportant.
For example, if you've got asuburb where you're typically
typically selling three units amonth and then you have a
(01:22):
developer who's building a 40store, 40 unit development and
their idea is, oh, we'll justsell them at the end, that's
going to be very difficult whenthe uptake per month is normally
three and you're going to tryand expect to sell 40.
So depth of market is veryimportant.
Speaker 1 (01:40):
Mark, take it away yeah, I think if you want to.
I liken it to bananas and likeif your family's eating five
bananas a week and you'reordering five bananas a week and
suddenly 50 bananas turn up toyour family in the shop and
they're really, really cheap,would you buy them?
The answer is probably nobecause you're thinking to
(02:02):
yourself well, I have no needfor 50 bananas.
It works like that for propertyon a massive scale.
If you look at dy, for instance, we may trade 550 units, a
which is bigger than sydney cbd.
In a typical year 550 unitswould trade.
Now what happens when a meritancomes along with 360 units and
(02:27):
simply wants to sell them inthat year?
There's not enough depth ofmarket.
Doesn't matter how well youdiscount those products, it just
won't sell at a decent pricewhen you're with discounting.
There just won't be thattake-up because there's not that
depth of market.
So say it's 550 units a year,that's maybe 45 units a month.
(02:49):
If you're trying to sell your360 units, you've just got to
accept that you're probablygoing to do 10 a month but
you're not going to be doing 50a month.
You're not doubling the volumeinto that marketplace and this
is very important.
Speaker 2 (03:04):
Like dy is a is really a great suburb for
developments because that thatdepth of market is massive.
Like we're looking at otherdevelopments in monoval,
narrowbean, where there is onlysingle digit apartments selling
per month and some developerslooking to do the bigger
developments, because it'salways that catch 22 rule of
(03:24):
thumb is you get more for yourproperty once a buyer can walk
through it, once the developmentis built.
But if the depth of market issingle digits and you have a
large volume same with yourbanana example you're only going
to if they, only if the familyonly needs five, you might be
able to entice them to buy eightif you're giving them a
(03:46):
discount, but if you need to getrid of 50, it's not going to
work.
So therefore you have to stagethe selling through before the
building has started, duringconstruction and then at the end
as well, which is why it's veryimportant Stage and discount.
Speaker 1 (04:03):
Stage and discount.
People simply don't need um, soyou know whether the existing
stock gets gets discounted orthe new stock gets discounted in
, the marketplace is going to bediscounting when there's more
stock being dropped in suburbs.
Speaker 2 (04:17):
fact yeah, and that's like what we say to developers.
There's like a price list, butthen there's a selling stage and
a selling price list as well.
There's some units you more,you want to sell sooner rather
than later.
And then we all know there'ssome of those hero units in
every development.
They may have the great view,they may have the great
(04:37):
courtyard, the access.
There tend to be ones.
If you've only got 10 to sellat the end, then you want to
make them your best 10, which isvery important and people think
it's actually the amount of.
Speaker 1 (04:50):
It's the amount of units in that suburb.
So they're going oh my god,I've got a thousand units in my
suburb and now there's going tobe 2 000 units over the next
couple of years.
I'm actually not that concernedwith the two, with the extra
thousand units coming into thesuburb.
I I would be more concerned asa developer and I would be more
concerned as a landowner and abuyer on that flow hitting the
(05:13):
market, which is what we'retalking about today.
That depth of market.
That's what I'll be concernedwith, because you can see now
that once Merit and DY haslocked in, everyone's moved in.
It's the markets reallystabilized and those are shit
hot, expensive units now becauseyou just can't get one in there
(05:34):
anymore.
So there's the fact thatthere's more units in dy doesn't
really matter, but the fact ofwhen they were dropping that
supply into the market, that's.
Speaker 2 (05:45):
That's what you really got to watch out for,
guys and I think if you have asecond-hand apartment, a lot of
the time when there's new stockon the market it actually works
in your favor, especially withbuild cost and everything being
so expensive.
Like, let's face it, these newapartments are the cream of the
crop, are the most expensive ineach asset class and a lot of
the time it can make a buyertake a step, bang going okay,
(06:07):
I'll buy second hand that lookslike more value.
And when they can see, let'ssay, for a one bedroom, uh, a
new one comes out at a milliondollars and you were at 800.
There's 200 grand of growththere as well and fluctuation
where, if that one million newproperty wasn't on creating that
glass ceiling for buyers, theymay think 850 is too much, 820,
(06:31):
880 is too much to pay for yourproperty.
But when they see a milliondollars over there, they go well
.
If you get in a bit of abidding war or the price goes up
, they're okay with it becauseit's still better than the next
option.
So a lot of the time it canwork in your favor.
Speaker 1 (06:46):
Um, selling second hand alongside brand new so how
would you make money out ofdepth of market?
When, now that we've talked,now that we explained depth of
market, what's an example wherewe'd make money from, where a
buyer would make money from that?
Speaker 2 (07:01):
where?
Oh, and this is what I said,the great thing I said before we
got on air Knowing the depth ofmarket can have more of an
influence than the market on theprice of your property.
And I had this with my brotherI was chatting to him about he's
got one of those duplex houseswhich is single level.
(07:21):
He's got the front and backyardand then a two bedroom upstairs
, owned separately buteffectively he's got that single
house level.
Feel.
So, a buyer who's by looking athis property, is also looking
at single level homes.
Now, with depth of market, ifthere is 10 single level homes
(07:44):
who aren't duplexes on themarket, then that's going to
impact him more because thatsingle level home buyer will
choose a property that doesn'thave an external property
upstairs.
But if you can pick the marketwhen there's one or no other
single level homes on the marketand all those single level
buyers are going to be lookingat floors, that could create
(08:06):
some competition with buyers andhave a bigger influence on the
price.
Knowing the market, knowingwhen's a good time and a bad
time and or when it is saturatedbecause we see a consistent
amount of people looking to buythroughout the month so, just
like you said there may be 45properties selling a month.
(08:26):
There may only be 55 buyers.
So there there is.
There.
There is that curve wherethere's almost too many
properties on the market andbuyers have that um bidding war
like they're.
They're pitting propertiesagainst each other because
they've got so much choice.
Exactly.
(08:47):
So I think it's recognizingwhat what else is on the market
and knowing a lot of time.
The buyer doesn't need to dothis, but it's up to the agent,
but not the buyer.
The seller doesn't need to dothis, it's the agent doing it
for you.
But as a buyer you should be,because a lot of time you're
representing yourself.
You should be aware of this aswell.
Speaker 1 (09:08):
And I guess that works for the rental market as
well.
Speaker 2 (09:11):
Depth of market applies to the rental market we
see it all the time in theboarding house, in the studio
apartment games, where we have ablock of 30 studio apartments.
When we only have one come upfor lease, we get a hero price.
We let's say it's 450, but whenwe have three of them we're
likely renting them for 400 425because there's only a certain
(09:31):
amount of people and you don'twant it having empty on an
extended time period.
Speaker 1 (09:38):
Did you see that what I sent you about watches, on
Rolex watches, when you go intotheir shop and they don't have
any for sale.
Speaker 2 (09:46):
Yes, it's one of the weirdest things in the market
and you wonder how they inbusiness, but it just shows our
society loves the fluff,scarcity, and is that depth of
market?
They're controlling depth ofmarket.
Yes, they're controlling it.
So, guys and girls.
Speaker 1 (10:08):
You can find this on Insta.
It's really interesting towatch.
There's a guy that goes allaround the world and walks into
all of the rolex stores, um, andsays I want to buy rolex and
every single person behind thecounter says don't have it,
don't have anything.
You know, I've, I've done it.
I don't have that for sale, Idon't have this for sale, I
(10:28):
don't have that for sale.
That's don't have this for sale, I don't have that for sale.
That's a really hard one to get.
That's a limited collection andthey never have what he wants
all around the world and forwhat he asks for.
So they're almost controllingthat depth of market.
It's not like you want one ofthose.
We've got 20 here today.
Have the 19th of 20.
Watch, it's like scarcity.
(10:51):
So depth of market is very,very important.
If you've got too much, you'regonna you're gonna tank your
market, as you know, badly aswell as as a seller.
Speaker 2 (11:01):
It's amazing.
I think in that clip it's likerolex made 1.3 million watches
and then you got this guywalking into every store trying
to buy one, not being able to.
He's like well, how did theysell these?
Or they sold 1.3 million.
He's like how to who?
If it was any other company,you'd think it's some type of
bloody ponzi scheme or laundrylike money laundering or maybe
(11:21):
it is yeah, yeah, it's that it'sthat thing, but you can benefit
from it.
Speaker 1 (11:26):
I think that you know what.
I think that, michael, that'swhat you call off-the-plan
buying or off-the-plan value.
I think that's where you'regetting value with off-the-plan.
If you're buying into a suburbwhere there's scarcity of stock
and suddenly there's a newbuilding and then after that is
scarcity of stock again, that'swhen you're actually getting
(11:46):
discounted stock.
When you're buying um off theplant because it's there's too
many of those of those stock umcoming on the market, you buy
one, you buy one cheaper becausethey're discounting.
Then when you go to sell it,there's none of them on the
market.
You get a bump.
I call it the banana bump.
But um, we saw it in jubilee inwarrywood.
(12:07):
You know those we got for theexact same town, exact same
warehouse.
We got 150 000 more um.
So we had, we had like eightfor sale.
They're all like one, one, one,one, one, one, one, one, one,
one.
All sold out except for onemore.
The one more that we had wentfor 125, went for the 150 grand
(12:32):
more a couple of weeks later andit was like what the hell
happened there.
Speaker 2 (12:37):
Yeah, and it's like with that's where, yeah, depth
of market can influence pricingmore than the market.
Speaker 1 (12:49):
There you go.
Well, have a great day.
Mr Berger, you too, mr Norlack.
All right, depth of market.
Hope that helped you guys outthere.
Love you, see you Bye.
Guys, discussion off the back of yesterday with
developers.
We deal with all spectrum ofdevelopers big developers,
little developers and oftenwe're educating them on our
market.
Depth of market was a topic wehad yesterday to talk about our
area.
It applies to all areas.
You've got to know what thismeans because it makes you money
(00:21):
.
Depth of market.
Speaker 2 (00:36):
Stay tuned.
Welcome to Morning MinutesMyself, michael Bergio, mark
Novak.
Episode 1454, jamming in thebackground.
Depth of market is the topictoday.
(01:00):
I think it's a really importanttopic and, as Mark said in, and
especially when it comes todevelopers, is the amount of,
let's say, units that suburb cansell each month, month to month
, and where this is veryimportant.
For example, if you've got asuburb where you're typically
typically selling three units amonth and then you have a
(01:22):
developer who's building a 40store, 40 unit development and
their idea is, oh, we'll justsell them at the end, that's
going to be very difficult whenthe uptake per month is normally
three and you're going to tryand expect to sell 40.
So depth of market is veryimportant.
Speaker 1 (01:40):
Mark, take it away yeah, I think if you want to.
I liken it to bananas and likeif your family's eating five
bananas a week and you'reordering five bananas a week and
suddenly 50 bananas turn up toyour family in the shop and
they're really, really cheap,would you buy them?
The answer is probably nobecause you're thinking to
(02:02):
yourself well, I have no needfor 50 bananas.
It works like that for propertyon a massive scale.
If you look at dy, for instance, we may trade 550 units, a
which is bigger than sydney cbd.
In a typical year 550 unitswould trade.
Now what happens when a meritancomes along with 360 units and
(02:27):
simply wants to sell them inthat year?
There's not enough depth ofmarket.
Doesn't matter how well youdiscount those products, it just
won't sell at a decent pricewhen you're with discounting.
There just won't be thattake-up because there's not that
depth of market.
So say it's 550 units a year,that's maybe 45 units a month.
(02:49):
If you're trying to sell your360 units, you've just got to
accept that you're probablygoing to do 10 a month but
you're not going to be doing 50a month.
You're not doubling the volumeinto that marketplace and this
is very important.
Speaker 2 (03:04):
Like dy is a is really a great suburb for
developments because that thatdepth of market is massive.
Like we're looking at otherdevelopments in monoval,
narrowbean, where there is onlysingle digit apartments selling
per month and some developerslooking to do the bigger
developments, because it'salways that catch 22 rule of
(03:24):
thumb is you get more for yourproperty once a buyer can walk
through it, once the developmentis built.
But if the depth of market issingle digits and you have a
large volume same with yourbanana example you're only going
to if they, only if the familyonly needs five, you might be
able to entice them to buy eightif you're giving them a
(03:46):
discount, but if you need to getrid of 50, it's not going to
work.
So therefore you have to stagethe selling through before the
building has started, duringconstruction and then at the end
as well, which is why it's veryimportant Stage and discount.
Speaker 1 (04:03):
Stage and discount.
People simply don't need um, soyou know whether the existing
stock gets gets discounted orthe new stock gets discounted in
, the marketplace is going to bediscounting when there's more
stock being dropped in suburbs.
Speaker 2 (04:17):
fact yeah, and that's like what we say to developers.
There's like a price list, butthen there's a selling stage and
a selling price list as well.
There's some units you more,you want to sell sooner rather
than later.
And then we all know there'ssome of those hero units in
every development.
They may have the great view,they may have the great
(04:37):
courtyard, the access.
There tend to be ones.
If you've only got 10 to sellat the end, then you want to
make them your best 10, which isvery important and people think
it's actually the amount of.
Speaker 1 (04:50):
It's the amount of units in that suburb.
So they're going oh my god,I've got a thousand units in my
suburb and now there's going tobe 2 000 units over the next
couple of years.
I'm actually not that concernedwith the two, with the extra
thousand units coming into thesuburb.
I I would be more concerned asa developer and I would be more
concerned as a landowner and abuyer on that flow hitting the
(05:13):
market, which is what we'retalking about today.
That depth of market.
That's what I'll be concernedwith, because you can see now
that once Merit and DY haslocked in, everyone's moved in.
It's the markets reallystabilized and those are shit
hot, expensive units now becauseyou just can't get one in there
(05:34):
anymore.
So there's the fact thatthere's more units in dy doesn't
really matter, but the fact ofwhen they were dropping that
supply into the market, that's.
Speaker 2 (05:45):
That's what you really got to watch out for,
guys and I think if you have asecond-hand apartment, a lot of
the time when there's new stockon the market it actually works
in your favor, especially withbuild cost and everything being
so expensive.
Like, let's face it, these newapartments are the cream of the
crop, are the most expensive ineach asset class and a lot of
the time it can make a buyertake a step, bang going okay,
(06:07):
I'll buy second hand that lookslike more value.
And when they can see, let'ssay, for a one bedroom, uh, a
new one comes out at a milliondollars and you were at 800.
There's 200 grand of growththere as well and fluctuation
where, if that one million newproperty wasn't on creating that
glass ceiling for buyers, theymay think 850 is too much, 820,
(06:31):
880 is too much to pay for yourproperty.
But when they see a milliondollars over there, they go well
.
If you get in a bit of abidding war or the price goes up
, they're okay with it becauseit's still better than the next
option.
So a lot of the time it canwork in your favor.
Speaker 1 (06:46):
Um, selling second hand alongside brand new so how
would you make money out ofdepth of market?
When, now that we've talked,now that we explained depth of
market, what's an example wherewe'd make money from, where a
buyer would make money from that?
Speaker 2 (07:01):
where?
Oh, and this is what I said,the great thing I said before we
got on air Knowing the depth ofmarket can have more of an
influence than the market on theprice of your property.
And I had this with my brotherI was chatting to him about he's
got one of those duplex houseswhich is single level.
(07:21):
He's got the front and backyardand then a two bedroom upstairs
, owned separately buteffectively he's got that single
house level.
Feel.
So, a buyer who's by looking athis property, is also looking
at single level homes.
Now, with depth of market, ifthere is 10 single level homes
(07:44):
who aren't duplexes on themarket, then that's going to
impact him more because thatsingle level home buyer will
choose a property that doesn'thave an external property
upstairs.
But if you can pick the marketwhen there's one or no other
single level homes on the marketand all those single level
buyers are going to be lookingat floors, that could create
(08:06):
some competition with buyers andhave a bigger influence on the
price.
Knowing the market, knowingwhen's a good time and a bad
time and or when it is saturatedbecause we see a consistent
amount of people looking to buythroughout the month so, just
like you said there may be 45properties selling a month.
(08:26):
There may only be 55 buyers.
So there there is.
There.
There is that curve wherethere's almost too many
properties on the market andbuyers have that um bidding war
like they're.
They're pitting propertiesagainst each other because
they've got so much choice.
Exactly.
(08:47):
So I think it's recognizingwhat what else is on the market
and knowing a lot of time.
The buyer doesn't need to dothis, but it's up to the agent,
but not the buyer.
The seller doesn't need to dothis, it's the agent doing it
for you.
But as a buyer you should be,because a lot of time you're
representing yourself.
You should be aware of this aswell.
Speaker 1 (09:08):
And I guess that works for the rental market as
well.
Speaker 2 (09:11):
Depth of market applies to the rental market we
see it all the time in theboarding house, in the studio
apartment games, where we have ablock of 30 studio apartments.
When we only have one come upfor lease, we get a hero price.
We let's say it's 450, but whenwe have three of them we're
likely renting them for 400 425because there's only a certain
(09:31):
amount of people and you don'twant it having empty on an
extended time period.
Speaker 1 (09:38):
Did you see that what I sent you about watches, on
Rolex watches, when you go intotheir shop and they don't have
any for sale.
Speaker 2 (09:46):
Yes, it's one of the weirdest things in the market
and you wonder how they inbusiness, but it just shows our
society loves the fluff,scarcity, and is that depth of
market?
They're controlling depth ofmarket.
Yes, they're controlling it.
So, guys and girls.
Speaker 1 (10:08):
You can find this on Insta.
It's really interesting towatch.
There's a guy that goes allaround the world and walks into
all of the rolex stores, um, andsays I want to buy rolex and
every single person behind thecounter says don't have it,
don't have anything.
You know, I've, I've done it.
I don't have that for sale, Idon't have this for sale, I
(10:28):
don't have that for sale.
That's don't have this for sale, I don't have that for sale.
That's a really hard one to get.
That's a limited collection andthey never have what he wants
all around the world and forwhat he asks for.
So they're almost controllingthat depth of market.
It's not like you want one ofthose.
We've got 20 here today.
Have the 19th of 20.
Watch, it's like scarcity.
(10:51):
So depth of market is very,very important.
If you've got too much, you'regonna you're gonna tank your
market, as you know, badly aswell as as a seller.
Speaker 2 (11:01):
It's amazing.
I think in that clip it's likerolex made 1.3 million watches
and then you got this guywalking into every store trying
to buy one, not being able to.
He's like well, how did theysell these?
Or they sold 1.3 million.
He's like how to who?
If it was any other company,you'd think it's some type of
bloody ponzi scheme or laundrylike money laundering or maybe
(11:21):
it is yeah, yeah, it's that it'sthat thing, but you can benefit
from it.
Speaker 1 (11:26):
I think that you know what.
I think that, michael, that'swhat you call off-the-plan
buying or off-the-plan value.
I think that's where you'regetting value with off-the-plan.
If you're buying into a suburbwhere there's scarcity of stock
and suddenly there's a newbuilding and then after that is
scarcity of stock again, that'swhen you're actually getting
(11:46):
discounted stock.
When you're buying um off theplant because it's there's too
many of those of those stock umcoming on the market, you buy
one, you buy one cheaper becausethey're discounting.
Then when you go to sell it,there's none of them on the
market.
You get a bump.
I call it the banana bump.
But um, we saw it in jubilee inwarrywood.
(12:07):
You know those we got for theexact same town, exact same
warehouse.
We got 150 000 more um.
So we had, we had like eightfor sale.
They're all like one, one, one,one, one, one, one, one, one,
one.
All sold out except for onemore.
The one more that we had wentfor 125, went for the 150 grand
(12:32):
more a couple of weeks later andit was like what the hell
happened there.
Speaker 2 (12:37):
Yeah, and it's like with that's where, yeah, depth
of market can influence pricingmore than the market.
Speaker 1 (12:49):
There you go.
Well, have a great day.
Mr Berger, you too, mr Norlack.
All right, depth of market.
Hope that helped you guys outthere.
Love you, see you Bye.
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