Rent scam: How scammers are using living crisis to fleece Aussies

Unsuspecting Aussies are being targeted in a series of scams that capitalise on the cost of living crisis. This is how.

Vulnerable tenants are increasingly falling victim to rental scams amid crippling accommodation shortages and record competition for housing.

Long-term rental rights advocate and Tenants’ Union of NSW head Leo Patterson Ross said conditions were “ideal” for scammers because more renters were “desperate”.

He said urgent action was required to stem the flow of tenants losing money to unscrupulous operators running rental rorts.

Just 1.1 per cent of all Australian rental stock was vacant in February – a near record low – while tenant demand has been steadily picking up.

It’s led to long queues outside many rental inspections and tenants often taking months to find new housing.

A recent rental inspection in inner Sydney. Scammers are capitalising on the tight rental conditions. Picture: Sam Ruttyn

“We’re seeing more scams,” Mr Patterson Ross said, noting scams tended to appear on social media and free classified websites and were outside the “formal” market of large property listings sites.

MORE: ‘Be cautious’: areas where you’re at risk of overpaying

He added that some of the most common scams were “nothing new”, but renters had become more susceptible to falling for them in the current rent crisis after struggling to secure a roof over their heads.

“A common scam we see on Facebook is for properties to be listed for cheaper prices, like $100 less per week below anything else, to get more attention. That’s just the start,” he said.

Mr Patterson Ross said that these scammers will show good quality pictures, often from past real estate ads, but prospective tenants will be told the home cannot be inspected for whatever reason.

Tenants Union CEO Leo Patterson Ross said tenants were getting desperate. Picture: Jonathan Ng

A common explanation is that the owner is overseas. The scammers then tell the home seekers that they can secure the home right away at the attractive rental price if they pay the bond.

“Often the people behind this aren’t the owner at all. They don’t have permission to rent the property out. It’s a complete fabrication.”

Some scams could be hard to spot, especially if the scammers knew the local market well, Mr Patterson Ross said.

“The model of ‘I won’t let you inspect the property’ has been around for at least a decade. But people are more vulnerable to being pushed into the scam because rents are so volatile.

“A price $200 or $300 below market rents is usually a strong red flag that’s it’s too good to be true, but it gets harder if it’s just a little cheaper. The hardest to spot are where the rent is attractive enough to attract more attention, but still within the realm of possibility.”

One way the government could fix the problem, according to the Tenants’ Union, was by setting up a registration system for rentals, a system currently in operation in much of the UK and Ireland.

“This way you can look up the registration number and you know the person you are dealing with has a legal right to offer that property,” Mr Patterson Ross said.

It comes as PropTrack’s Rental Affordability Index launched last week showed rental affordability this year dropped to its lowest point since records began 17 years ago.

Those on an average income could only afford about a third of all rentals advertised across the country, while those on a lower income could afford less than 5 per cent.

“Something you have to consider is this. How likely is that a lower income earner would secure something among that 5 per cent of affordable rentals? Other tenants on higher incomes are more likely to get approved than they are,” Mr Patterson Ross said.

Scammers often used old images for previous listings.

“It’s created a situation where lower income renters are facing tough decisions about how to keep a roof over their heads. We’ve seen tenants in this situation renting homes with serious quality issues.”

SQM Research director Louis Christopher said it was unlikely renters would see respite from the gruelling rental conditions any time soon.

“Going forward, our best-case scenario for renters is that the population growth rate slows considerably this year to an increase of about 360,000 people, which would likely mean a stabilisation in rents starting from the June quarter,” Mr Christopher said. “The worse-case is population continues to boom at current rates.”

Rental observer Jordan van den Berg, founder of popular TikTok account @purplepingers and shitrentals.org, said more landlords needed to be held accountable for poor quality rentals.

He said there has been a rise in landlords listing properties that were uninhabitable or advertised with false information or images that were not representative of the current condition.

“These kinds of properties are still on the market and becoming more prevalent, these landlords know that people are even more desperate and it’s becoming the new normal which I think is wrong,” Mr Van den Berg told News Corp last week.

PropTrack data released Friday revealed the share of vacant rental homes on the market dropped to just 1.11 per cent in February. It was the lowest vacancy rate on record.

Originally published as Rent scam: How scammers are using living crisis to fleece Aussies