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Brokers are forcing desperate renters to ‘bid’ on homes in the latest grim development in Australia’s cutthroat rental market.
On average, rents in Australia have risen by 10.3 percent since the start of 2022, with low housing supply and the reopening of borders contributing to the tightness.
But it’s not a level playing field for all applicants — with landlords and real estate agents in some regions now often deciding who gets a home based on “rent offers,” where hopefuls offer extra money or pay months in advance to get hold of a home.
“There is a generally accepted principle of fair market value, which is the price that willing but not fearful participants in a deal would make,” said Leo Patterson Ross, CEO of the NSW Tenants’ Association. 7News.
Hopeful tenants resort to paying agents and landlords well above advertised prices to secure a home (stock image)
He said the principle was increasingly being tested as tenants “facing homelessness” began to worry about their ability to not only find a home, but even find a home they wanted. rent.
Tenants have resorted to calling agents to offer additional incentives to get their application to the top of the pile, including paying extra rent or paying months in advance.
“We’re definitely seeing a lot more rental offers,” said Tim McKibbin, the boss of Real Estate Institute NSW.
‘It does occur in periods of tighter vacancy, but it is getting more and more intense. Maybe they offer more for the week or more in advance.’
Australia’s rental market is more competitive than ever with hopeful tenants queuing by the hundreds in the country’s capitals.
The national rental vacancy rate is at a record low of 0.9 percent, according to research data from Domein.
A recent photo taken in Bondi, eastern Sydney, showed candidates queuing for a house to inspect it.
This photo of a crowded open inspection in Bondi (pictured) sums up Sydney’s major rent crisis, where desperate tenants compete for properties
Sydneysiders have shared some of their experiences in the increasingly difficult rental market (Photo: Community Facebook Group Comments)
While Victoria, Queensland and Tasmania prohibit landlords and brokers from accepting bids beyond the advertised rent, other states and territories are more relaxed.
NSW Fair Trading advises that as long as real estate advertisers don’t make misleading statements, such as falsely claiming that another applicant has bid a higher price, they can accept a better offer.
With the on-the-side deals being struck, rents have probably risen more than officials think in some competitive markets such as Sydney and Perth.
According to research firm PropTrack, at the start of 2020, 41.8 percent of rental properties advertised on realestate.com.au were under $400 a week across Australia.
But by September of this year, that figure had fallen to just 19.3 percent.
The capital’s rental rate of less than $400 a week was just 16.4 percent in September, compared to 36.1 percent in March 2020.
In Sydney, weekly rents rose an average of 10 percent year-on-year in the September quarter, with the median home rent rising to $640 and the median rent rising to $520 per week.
NSW’s top body for housing policy, Shelter NSW, previously told Daily Mail Australia that applying for rental housing has become ‘like The Hunger Games’ (Photo: Bondi)
A long line of potential tenants winds down the side path of a Sydney street, waiting for a $700-a-week two-bedroom rental in the eastern suburb of Clovelly
Cameron Kusher, PropTrack’s director of economic research, said the answer to the problem was to build more homes and get more supply to the market, easing the pressure.
There are a number of major housing projects in the pipeline across the country, but until they hit the market, Mr Kusher said he expects the market to become even more competitive.
The Albanian government will spend $350 million on 20,000 affordable homes, co-invest with super funds and institutional investors, and work with states and territories in an effort to bring more supply to the market.
A Housing Australia Future Fund would provide an additional 30,000 social and affordable housing within five years.
Both are part of the government’s larger plan to build a million “well-located” homes by the end of the decade.