Cruel Sydney rental market trend leaving desperate Australians homeless
Sydney’s crushing rental market could see strict new laws brought in to ban the cruel trend of ‘rent bidding’. Here’s how it works.
NSW
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Real estate agents will be investigated over driving up rental prices by creating bidding frenzies as the government prepares to bring in new laws to stop the dodgy practice.
Rent bidding is the process of negotiating the price of a rental by advertising a property within a “range” or without a fixed cost.
In Queensland, Victoria and Tasmania rents have to be advertised at a fixed price.
Landlords and real estate agents are banned from explicitly inviting rental bids or soliciting offers of rent higher than the advertised price. There is no such law in NSW.
Fair trading Minister Victor Dominello revealed to The Daily Telegraph he had asked department boffins to dig into the issue with an eye to reform aimed at protecting vulnerable people.
“This is obviously an area where vulnerable people are exposed and needs reform,” he said.
“I have asked my agency to investigate and come back with recommendations.”
On TikTok, Sydney woman and CEO of swimwear label Siempre Golden, Sophia Kim, said the Sydney rental market was a “dog-eat-dog world”.
While she has now found a property, she realised people had pre-filled in applications and were returning them immediately after the first inspection.
“I’ve never had to fight this hard for something in my life. Trying to find somewhere to rent in Sydney is wild,” she said.
“Starting to realise real estate agents are just trying to create bidding wars/competition for renting,” she wrote in one video in September.
Labor housing spokeswoman Rose Jackson said the market which allowed rent bidding was putting vulnerable people at risk.
“It isn’t fair that agents are encouraging that practice and taking advantage of people when we have these historically low vacancy rates and double digit rent increases,” she said.
“Everyone who is participating in the rental market in Sydney right now knows that.
“The wholly unregulated practice of rent bidding is putting pressure on tenants and making it really tough for them.”
Tenants’ Union of NSW chief executive Leo Patterson Ross said rent bidding was exacerbated by desperate families facing a shortage of “genuinely affordable properties”.
“In the current situation, people are having to compromise quality, safety and location. We see people suffering from real health impacts and they are being pushed further away from their communities,” he said.
“About 40 per cent of lower income renters in some areas are unable to afford the areas they are in or find an affordable home. That means they can’t buy food, healthcare, education — the things that they need to be healthy and also that are healthier for the economy over all.”
Mr Patterson Ross welcomed Mr Dominello’s decision for a review into the crisis.
“It’s important that governments show they are responsive to community needs.”
Tenant agent Sarah Elkordi, a former property manager, said the current rental market is “absolute chaos” driven by agents using rent bidding.
Ms Elkordi, who started her own firm The Rent Fairy in 2020, is part of a growing number of agencies which charge a fee to take over the entire rental application process: from the property search, to the application, to attending open homes.
“Our client base are professional people who are struggling to be approved for rental properties. We’re finding the reason 80 per cent of them are not being approved is because they’re simply being outbid,” Ms Elkordi told The Telegraph.
She added that she’s seeing 80 per cent of her clients turned away from applications, without consideration, because they’ve been outbid.
“It’s absolute chaos,” she said.
“What’s happening is: People with a budget of $800 are downgrading to smaller properties that rent for $650 out of desperation, and bidding them up,” Ms Elkordi said.
“So the vast majority of renters are finding the kind of house they would have achieved a year ago is no longer in their price range.
“I would love to have bidding become illegal in Sydney, because I really think it does not give people who have set budgets a fair opportunity.”
In the past nine months, Ms Elkordi has seen a $100-$150 per week price hike on most Sydney rental properties.
Gabriella Lizzo, 31, has to find a new rental within a month and has been repeatedly out-bid on properties in Coogee.
“I’m a marketing and PR consultant, I am a business owner and I work full time from home so the space is both home and home office. It’s been extremely stressful, even with a high budget, to find a place,” she said.
“Something even within a $1500 bracket is too hard to find, I think that speaks dramatically for the Sydney property market.
“We’ve constantly been bid out or had the place already taken without people even seeing it.”
WE CAN’T AFFORD TO LIVE NEAR OUR WORK
Families, apprentices, students and professionals are being squeezed out of the Sydney rental market with prices so high they simply cannot afford to live anywhere near their jobs in the city.
Mortgage broker Michael Boateng rents a Zetland townhouse with data centre manager Brendan Lynch and child brain cancer science PHD student Alexis Minchaca for $1250 a week.
In August, the three of them were paying $1050 a week when they were sent an email telling them their rent was jumping to $1350 a week.
Mr Boateng said it took him a month to negotiate a compromise, and their rent is now only going up $200 a week.
“When I write up a budget it doesn’t go that far … I’m on a decent income but this goes to (university loan fees), tax, food, fuel, and then a third goes to rent,” he said.
“But you see the moving trucks as people are getting priced out of the market. It would not even be possible for a single income family, there are moving trucks coming in because these people are leaving.”
Mr Lynch said it was becoming “harder to hang on’’.
“I’m working extra shifts, (Sunday was) one of them, not to save but to cover the rent,” he said.
“(I) can’t imagine what it’s going to be like when people start returning to work in the office and overseas students return.”
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