Written by Stefan Kostarelis
The apps allow would-be tenants to go head-to-head with offers for properties, while seeing what others are bidding and allowing landlords to choose the best offer.
Domain reports that three such apps will be launching in Australia this year: U.S.-based Rentberry and LiveOffer and Australian start-up Rentwolf.
Although the apps are built on a similar premise, there are some differences between them.
Of the three, Rentberry has created the most controversy. Tenant associations in the U.S., U.K. and Australia have criticised the app for profiting from housing crises and pushing rent in high demand markets such as San Francisco, London and Melbourne even higher.
But Alex Lubinsky, co-founder of Rentberry, said the platform will bring much-needed transparency to the Australian rental market.
“There is always controversy when there is something new – some people act with fear [because] they still have not understood it,” he said. “When Uber came out, people said it was stealing taxi jobs, they don’t have insurance, many things, but we all know now [these] companies brought huge positive change.”
LiveOffer, which was created by U.S.-based real estate tech company Property Connect claims that it will create a much fairer market value rent than Rentberry.
“The approach Rentberry has taken is trying to get as much disruption as possible, and they’ve rubbed people the wrong way,” Property Connect founder and chief executive Tim Manson told Domain. “I’ve seen companies come and go in this space and where they falter is they don’t offer enough features for the renter.”
Manson says the main point of difference between LiveOffer and Rentberry is that LiveOffer is “not a bidding system but an offer system”. Like Rentberry, it will also allow users to see what other tenants are offering, but in contrast, its interface includes a broader range of factors.
“We provide tips and tricks, an advice engine, to suggest how you can get the property by not pushing up the rent, [but] by putting a more preferred term in, such as a moving date … Competitors that have come out that are just purely bidding, they’re people from technology having a go at trying to push up rents. We’re not about that and we’re not about knocking out agents.”
Australian-owned Rentwolf has more in common with LiveOffer than Rentberry.
Similarly to LiveOffer, Rentwolf provides a system that allows tenants to broaden their “value proposition” beyond a purely financial offering.
“We believe this provides an even middle ground. For example, a tenant no longer has to compete with other high offers”, said RentWolf founder and CEO Chris Martino. “They can show the marketplace the value that they have with their own rental history, experience and profile.”
All three apps are expected to launch in Sydney first before moving on to Melbourne and other capital cities.
Sydney and Melbourne are currently in the midst of what’s been described as a housing bubble and have highly competitive rental markets and tight vacancy rates.
According to Domain’s Rental Report for the December Quarter 2016, median house rent in Sydney increased by 1.9 percent over the quarter reaching $540 per week. Meanwhile, Melbourne’s median house rent increased by 2.5 percent to $410 per week.
Last month, a study found that long-term Sydney and Melbourne renters are twice as likely to go to extreme measures, such as pawning items, to make ends meet.
At present, the Tenant Union of Victoria (TUV) website has a section in which it addresses rental bidding.
The TUV “believes the practice should be specifically outlawed” and is collecting signatures in order to petition the Victorian government, which is currently reviewing the state’s Residential Tenancies Act.