'Illegal' request to struggling student amid daunting rental crisis

Students scrambling to find rental accommodation are being pressured by real estate agents using unlawful practices to achieve higher rents.

A medical student struggling to find accommodation in Brisbane has been met with illegal advice from real estate agents ‘preying’ on his desperation.

The student, studying to be a doctor at the University of Queensland, has been couch surfing with friends since November, living out of a suitcase and spending countless hours attending rental inspections without success.

His mother told Yahoo News Australia real estate agents have suggested the fourth year student offer a higher rent and pay six months’ rent in advance.

“We would like him to concentrate on becoming a doctor but he keeps going for inspections most of the days, and so far has had no luck since the start of November 2022,” she said. “I am worried for him as he is living off the suitcase, staying with friends from one place to another.”

Left: a line of prospective tenants waits for an open home. Right: TikTok user Holly explains her struggles as a student trying to find a unit.
Another medical student says she's forced to live out of a suitcase. Source: TikTok/Hollyshabits

The agent's move was slammed by property experts, who said the advice was "inappropriate" and "illegal".

“The property manger has acted illegally and encouraged rent bidding which is banned in all states,” Dr Ameeta Jain, Course Director of Undergraduate Property and Real Estate Programs at Deakin University, told Yahoo News Australia.

While it’s acceptable in Queensland for a tenant to offer a higher rent, an agent must not proactively tell applicants to offer a higher price. And when it comes to rent in advance, the maximum that can be requested is two weeks for a periodic agreement and one month for a fixed-term contract, according to the Residential Tenancies Authority.

But Dr Muhammad Al Mamun, Senior Lecturer of Finance at La Trobe University, believes the issue of rent bidding will never truly disappear while tenants are allowed to raise the stakes themselves.

“If the law prohibits the supply side [from rent bidding], and the demand side is still engaging in such practices, the marginal group we are trying to protect – especially students with lower budget – it will be difficult. That’s the problem," he told Yahoo News.

“There are a huge number of international students facing this… this is something very problematic," he added, likening rent bidding to "extortion".

Students 'practically homeless'

The UQ medical student is just one of many students struggling to find affordable housing – and looking at social media it's clear to see the problem spans nationwide.

Another medical student in Perth took to TikTok to explain she was also living out of a suitcase and "practically homeless".

One international student due to arrive in Brisbane on February 11 wrote online: “I still don't have a place to sleep”.

“So far my search has been on ‘real estate’ but I have received very few answers, unfortunately of rejection because the house was already committed," she said on Facebook.

Another social media user said it took 64 applications for a uni student and their family to get approval in Brisbane.

Dr Jain said the rental crisis was similar in Melbourne and Sydney, with massive queues of prospective tenants attending every inspection.

One of the big issues hindering supply is house letting sites like Airbnb and Stayz, Dr Jain said.

“What we need is supply forthcoming. A lot of owners are putting their second property on Airbnb so that has reduced supply for long-term rentals.

A disincentive, such as a tax from the federal government, could be needed to steer property owners away from Airbnb and towards long term tenants, Dr Jain said.

“Unless that is done, the situation may not improve for some time,” she said.

Dr Muhammad also warned the crisis could worsen over coming years once the numbers of Chinese students bounces back to pre-Covid levels.

"Chinese students enrolment in 2022 is only 55 per cent of the number in in pre-covid period," he said, adding that the situation will only get more difficult "if we do not have additional housing supply".

University offering increased support

Students can arrange housing through UQ, however vacancy rates are low and many of the units are taken and have waiting lists.

The university told Yahoo News the prices are kept below the market price and are “allocated according to need”.

“The University increased accommodation support services for students last year, in recognition of the national rental crisis,” a spokesperson said. “UQ-owned accommodation rates are below the current market price and any vacancies are being allocated according to need.

“For most students moving to Brisbane on their own, there are options available. We are actively contacting real estate agencies to increase stock on our rentals platform which currently lists about 50 properties.

"Some students with specific needs may be finding it more difficult to secure a rental property and are encouraged to contact our Student Services for assistance.”

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