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Channel Ten News has labelled ‘rental bidding’ as a dirty tactic used by property managers, which should be banned – even suggesting it is the cause of a surge in demand for emergency accommodation.
The exposé from the media outlet called to “outlaw the dirty but still legal tactics of real estate agents” using bidding wars to force up rents.
During the segment, Ten interviewed Real Estate Institue of New South Wales (REINSW) president Malcolm Gunning, but only nine words from his interview were shown.
“We’ve all heard the stories about agents being unreliable and untrustworthy, and this Channel 10 story just piggy-backs on that notion,” Mr Gunning told Real Estate Business.
“If there’s 30 people lined up for a rental property and a couple particularly want it – they might offer a rent which is over the asking price, they may offer a longer lease or they may promote their credentials.
“Security and the state of the property are paramount, so a tenant with a good track record and good references could offer market rent and be picked over someone with a poor record even if they offer more.”
The Channel Ten story spoke to PR executive Jackie Levett, who applied for an inner-west Sydney apartment.
“I was told by the real estate agent that someone had already put in an offer above the asking price. They didn’t specify how much more… so I put in a little bit more and found that I didn’t actually win the application,” she said.
Ms Levett told the interview she felt it was unfair.
However, Mr Gunning said that so long as the agent is transparent about the transaction, there is nothing wrong with healthy competition.
“It may need to be communicated to the broader public a bit better. With the web, people can gather information and I wonder if people should be a bit more open about a rental price guide – no different to buying a property,” he said.
To rub salt in the wound, the report then suggested that rental bidding was the cause of a ‘Sydney rental shortage’, according to Dr Cassandra Goldie from the Council of Social Services.
“People on low and modest incomes are desperately needing a secure place to live and they cannot afford to find anywhere,” she said.
She then said more people are being forced into emergency accommodation, and wants the practice to be illegal.
However, there is a flip side according to Mr Gunning; if the tenant is willing to move into an undesirable property, they may offer below market rent.
“They may offer to paint or repair an aspect of the property and request a lower rent; it’s how a market based on supply and demand is meant to work,” he said.
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