Renters looking for new homes are being forced to “pre-apply” before inspecting properties, a process that can take hours and involves providing personal details, financial information and references.
Cassandra, who did not want her last name published, is looking for a place to rent in Melbourne after getting a job in the city. She said several listings she had come across during her search asked for pre-applications.
In one, for a property on Bell Street in Preston, the ad said tenants should “pre-apply” through the online platform 2Apply. The 2Apply form asks renters for proof of their identity, their rental and financial history, and at least two references.
“Once pre-approved our friendly team will contact you to organise an exclusive private inspection at a time that suits you,” the ad read.
Cassandra has also noticed rental properties getting snapped up before their first listed inspection.
“I called an agent today about a property that had been on the market for about 24 hours and had its first inspection tomorrow,” she said.
“The agent told me the inspection is cancelled now as someone has already leased it before viewing.”
Sean Budd, secretary of the Renters And Housing Union, said pre-approval took off during Covid but had become even more common because of low vacancy rates.
He said there was concern about the process because it took time and tenants had to hand over a lot of information.
“There’s a lot of things on top of that. The data is being stored with third parties, and we don’t know where it goes.”
Ben Harris, a full-time carer for his mum, has lived on the Mornington Peninsula for three years. The rent for their three-bedroom unit was recently increased from $120 a week to $520, meaning they have to move.
“With some properties I have been told I need to actually apply for the property before being given the chance to inspect,” he said.
But applying for properties has become exhausting and they are starting to look farther afield or potentially move in with someone else.
“We have had four knock-backs recently, despite being able to afford it and having a great rental history,” he said.
Eliza Owen, head of residential research at CoreLogic, said with rental vacancy rates so low properties are being snapped up quicker than ever.
She said for a typical rental property in Sydney the median time on the market has come down from 28 days in March 2020 – at the onset of the pandemic – to 19 days as of May this year.
“Melbourne has gone from 23 days … to 18 days”
And even those figures are likely an overestimation, Owen said, as they cover the whole online advertisement period.
“There could be a much shorter time between showing the property and it actually being rented,” she said.
Hayden Groves, president of the Real Estate Institute of Australia, said the low vacancy rates were causing “distortions” in the market, including people submitting applications before inspections.
“This would not be something agents would ordinarily be driving,” Groves said. “It comes from the tenant side, such is the desperation of tenants to find appropriate and affordable accommodation.”
Groves said agents dealing with hundreds of applications were understandably trying to weed out non-serious applicants.
“But it is not essential and certainly ought not to be mandated or insisted upon by the managing agent,” Groves said.
“It is never a good idea to lease a property to a tenant that has not had the opportunity to view the property personally or by proxy.”
