Is rental bidding the biggest issue affecting the rental market?
Given that state-wide vacancy rates continue to remain and record lows, there is no denying that it is tougher than ever for tenants to secure a new rental property.
The NSW Government has decided to introduce new regulations as part of the Property & Stock Agents Act that will prohibit landlords and agents from soliciting or encouraging prospective tenants to increase their offered rental price or compete in a rental auction.
The regulation is also expected to limit the advertising of rental properties to be at a genuine market price and not shown in a way that could be seen as baiting or encouraging rental bidding.
But is rental bidding really the biggest issue affecting tenants trying to secure a new home?
The vacancy rates in the Illawarra are currently hovering just below the 1% mark, this is incredibly low. A surge of covid driven sea-changes and the increasing population in the Illawarra has meant that supply has now been able to keep up with demand. A real estate market’s main form of control is supply and demand, when supply is reduced or restricted then demand increases and when demand is increased, the prices rise.
This isn’t really rocket science, it’s just economics 101.
Residential rental departments in NSW are already governed by the Property & Stock Agents Act, Residential Tenancies Act and the Australian Consumer Law. This means that prior to the regulatory changes, agents must already take steps to ensure they are not misleading prospective tenants through misleading advertising, and they must act honestly, fairly, and professionally with all parties in a transaction.
As we come closer to a state election, it seems more likely that the new regulation is part of a political move by the major parties rather than an actual benefit to tenants.
The real questions we should be asking are:
What is being done to encourage new investors in residential real estate?
What public housing projects are being planned and built to increase the number of public housing available?
With tenants desperate to secure a property, it’s no surprise that they will offer more if it increases their chance, and rarely is this solicited or encouraged by a landlord or agent, but rather an incentive offered by the tenant to increase their chances.
To give you an insight into the application process, once an application is received from a tenant, the offered rent only plays one part in the thorough checking that goes on.
Return to a landlord means so much more than the weekly rent offered, they want to make sure that the applicant will take care of their property, can pay rent regularly and the lease terms such as duration align with the landlords’ intentions.
Speed is a huge factor in finding a rental, my advice to tenants searching for a new home is to make sure you’re using the online application that is preferred by the agent and you have all your details pre-filled.
Make sure all your identification, payslips, statements, and rental history is included. Also make sure you reach out to your referees like your employer or past agents, make sure they know to expect our call.
