Tenants to tender for rental properties

An Australian rental agency is trialling a new system where rental properties are listed without a price for the first week of marketing.  

Sean Black, director of Sean Black Property.com, says his prospective tenants will now tender for tenancy at his agency.  
 
Rental demand and yield is extremely high in the Australian residential property market, and Black says his Australian first has already resulted in some incredible prices.
 
“Some owners have received as much as 10% yield on property, which is high when you consider investors in this part of the world have suffered returns as low as 3%-4% over the last few years.”  
 
Black says rental demand is so high in his outer Brisbane office that he believes this new system is the only way to be fair to tenants and landlords.
 
“Good tenants will be able to submit themselves as a ‘package’. For instance if two tenants bid on a property, the tenant with a better track record could be approved at a lower rent. That’s how a tender process works; a successful applicant is viewed on the merits of the whole ‘package’,” says Black.  
 
He says there are rumours the government plans to ban the process of listing rental property without a price, but says the current rental situation is a result of supply and demand. “Any attempt to interfere with the economics of rentals will only lead to a shortage of property supply as investors look for higher returns from other investments.”  
 
“It is only now that rent prices are catching up with property prices that property investor confidence is being restored to the broader Australian market,” says Black.
 
“Restored investor confidence will see a higher supply of rental properties in the coming year,” he predicts.  
 
Black says he has received a “huge, positive” response for his plans from tenants and landlords alike, and expects rental prices to peak in the next year.