Buying a property is out of many people’s reach in the current market. But renting, often touted as the fall back option, is no picnic either.

While Crikey understands that the federal government has been undertaking serious high-level discussions of late about this problem, at the coal face, low- and mid-income renters have been feeling the pinch for some time now.

40 people turning up to inspect a rental property is routine in cities like Canberra, Perth, Brisbane, Sydney and Melbourne where competition is high. And anecdotal evidence suggests that parties often negotiate with an agent behind the scenes, hoping to secure the advantage by either bidding above the advertised price or offering three-six months’ rent in advance — or both.

Bodies like the Real Estate Institute of Victoria say they’re against all this to-ing and fro-ing. “[We] don’t not condone rental auctions or price range advertising for rental properties,” a REIV spokesman told Crikey. “REIV believes that professional agents should be able to determine the appropriate rent that the landlord is seeking, advertise at that rate and lease the property to the most appropriate tenant who meets the criteria.”

Yes, but the temptation for an agent to negotiate a higher-than-advertised price is high, being an opportunity to get the best monetary result for a client while also scoring a higher price from which to draw a percentage commission. Yes, the sweeteners are often initiated by desperate tenants — but neither are they discouraged by some agents.

Meanwhile, getting a straight answer as to a prospective tenant’s rights is no mean feat. The states’ respective Residential Tenancies Acts kick in at the point of an agreement between the parties, so the messy pre-agreement stage is largely ungoverned, except where issues of fair trading arise. That said, accepting more than one month’s rent in advance as a hook is a practice that’s either banned or limited in all states and territories.

This morning, the NSW Office of Fair Trading told us that it hasn’t received any complaints about this matter. And while the issue is on state consumer and fair trading groups’ radars, they don’t seem to be investigating it seriously. And yet, the practice of rental bidding above the advertised price raises fair trading issues like “bait advertising” and “false and misleading conduct”, says David Imber, policy adviser at the Tenants Union of Victoria.

At the heart of this issue is housing affordability, he says. Low income earners have always struggled to enter the rental market, but now it’s middle income earners (often from two salary households) who are struggling to get a foothold. So low-income earners are more vulnerable than ever. That’s why the government should address the lack of affordable housing pronto.

Are you a renter, agent or landlord with a story to tell? Email [email protected].

Peter Fray

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