Rent-bidding apps to shake rental market
Online rental market places, where prospective tenants battle it out to secure rental properties, will soon become an unpleasant reality for renters with the upcoming launch of apps tailored for the Australian market.
LiveOffer, by US-based real estate tech company Property Connect, and Aussie start-up Rentwolf, will both launch rent-bidding apps in the coming months.
A few weeks ago, Rentberry, a controversial Silicon Valley start-up that specialises in rent bidding, said it would launch in Australia later this year.
Tenant unions are understandably alarmed, as these platforms could potentially jack up rates in Sydney and Melbourne’s already pricey rental markets.
Rental affordability is declining in most state capitals, according to Andrew Wilson, chief economist for the Domain Group. Sydney’s median asking house rent increased $25 a week to $550 in the 12 months to March, while Melbourne’s median weekly house rent rose $20 to $420.
Landlord insurance specialists have spoken out since Rentberry announced its launch in the Australian market, saying renters may financially overcommit themselves to secure properties in rent auctions.
“Impulsive, eBay-style bidding on rental apps like Rentberry may see Australian tenants fall into financial difficulty when vying for their preferred rental property,” said Carolyn Parrella, executive manager of Terri Scheer Insurance, to the Domain Group. “Tenants who use these apps could be lulled into the thrill of the chase and get caught up in the bidding process and commit to paying a rental amount that they can’t afford in the long term.”
There’s also concerns such apps could encourage renters to pay more than the market rate for rental properties, which could end up making renting unaffordable for many tenants.
Both the Tenants Union of NSW and Victoria are pushing to make rent bidding illegal in their states. In Victoria, Consumer Affairs is reviewing the issue in its refresh of the Residential Tenancy Act. “Rental bidding is one of a wide range of issues being looked at,” said a spokesperson for Consumer Affairs Victoria. “The aim is for any recommended changes to be introduced into, and passed by, Parliament in 2018, with implementation to follow.”
This article is an extract from Your Investment Property Mag written by.
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Property Friends is a specialist Property Investment Strategist that provides solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy. www.propertyfriends.com.au (03) 9758 5331