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Rental auctions to begin – UPDATED

By johnboy - 31 October 2006 38

[First filed: September 27, 2006 @ 11:27]

The Canberra Times reports that Peter Blackshaw is planning to start auctioning his client’s rental properties.

He says it’s going on informally already and he’d like to formalise it so that he can get a cut rather than his agents taking a backhander.

If you’re opposed to the practice you know who not to do business with.

UPDATED: The Daily Telegraph has picked up the story and is hailing Blackshaw’s world-first practice, while also mentioning the grave reservations held by many experts in the field.

What’s Your opinion?

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38 Responses to
Rental auctions to begin – UPDATED
Ari 3:33 pm 27 Sep 06

I participated in one of Peter Blackshaw’s tender processes when bidding for a house.

It’s basically an auction without the transarency of knowing what else has been bid.

I was unsuccessful (but was assured that my bid was second and would I like to offer $40,000 more … blah, blah, blah).

I walked away vowing never to deal with Blackshaw ever again.

Being kept in the dark while an agent attempted to manipulate me with lies generated enormous stress.

I believe transparency in such real estate transactions is great, but I don’t trust Blackshaw to deliver it.

podfink 3:16 pm 27 Sep 06

In the ACT, it takes nearly 20 weeks rent just to pay the rates, taxes and utilities. The rent is just over half the repayments. I must provide on-going tenants 6 mths notice to leave. Land values are stagnant in Canberra, so there’s no improvement in equity. Many other investors are selling their ACT properties and buying in QLD and WA. I don’t think that Peter Blackshaw’s rental auctions are unethical; they are trying to keep what few investors are left in the ACT market.

biogaz78 3:03 pm 27 Sep 06

Joker: Nice idea in theory, but if you have to find yourself a rental place in a hurry (like if you have moved to Canberra and dont know anyone) then you have very little option but to pay whatever it will take to get you into a place.

biogaz78 2:59 pm 27 Sep 06

As a renter in Sydney and now in Canberra I have witnessed this practice happening unofficially for some time. When applying for a rental property these days you have to complete a form which asks you what you are willing to pay for the property. Most people nominate a little bit less than the asking rate.

However, there is nothing stopping someone nominating a slightly higher rate, and thus more likely to get the lease.

This will happen more and more while the rental vacancy rate is at such low levels (about 1.9% i think in ACT).

At least this way renters will know why they failed to get a lease and how much the going rate is.

The ACT govt really needs to increase the level of affordable housing, increasing vacancy rates to around 5%, which should lead to slightly less competition and lower rents.

It wont happen though because all the MPs probably have a plethora of investment properties themselves and it will hurt their own personal interests.

Joker 2:52 pm 27 Sep 06

Realestate agents have sunk to a new low. It’s the same as the ‘Buyer Ranged’ rubbish when they sell houses, i just need to know one thing, what’s the PRICE?!

Advice to potential buyers and renters, Don’t play games and refuse to be made a fool of, walk away.

edlang 2:42 pm 27 Sep 06

What happens if the “reserve” is not met? The lessees could use this system to their advantage, too.

andy 2:27 pm 27 Sep 06

if i owned property, i wouldn’t let them do this to my properties.

meeJoko 2:07 pm 27 Sep 06

great, now Ill have to blame anyone living in a house or similar property for driving up rental prices, in addition to the wealthy, blood-sucking landlords, vile and despicable investors, I hearby label all renters as overbidding moral-less scum. Unless youre that guy living under a tarp near csiro, I DESPISE you!

Absent Diane 1:41 pm 27 Sep 06

I don’t think its wholly unethical but the amount of people who will be put off purely because they can’t bothered will be pretty big I suspect.

snahon 1:37 pm 27 Sep 06

I don’t see anything unethical about it – it is after all in a public scenario that denies any underhanded tactics. Investment properties are after all an asset used to generate money and as such if the market conditions are such that this becomes feasible then good luck to the proeprty owners. Granted it sucks big time for renters.

It will be interesting to see not only what sort of properties they put up for “auction” but the type of bidding that eventuates. After all this is new and many people just may not be comfortable bidding.

Mind you, never underestimate a real estates ‘creativity’ when it comes to generating business.

Blackshaw will need to careful what they put up first as a poor result could turn property investors and other real estates away from this methodology.

VYBerlinaV8 1:28 pm 27 Sep 06

As a landlord I would generally support anything that increases my rental yeild, BUT I think this is out of line because it uses people’s emotional reactions in a situation they may not be familiar with to increase the price. Bonfire is right – it is another market tool. But it’s a tool that heavily favours the experienced, and potentially disadvantages those who are inexperienced. Just my $0.02.

bonfire 12:59 pm 27 Sep 06

i think its interesting and will keenly observe.

is it ethical ? i dont see how it isnt.

the market already dictates the price paid.

this is just another market tool.

i think thumper is right though, it might not be a good option if the successful bidder cant meet the price they bid.

i’d like to see the cost breakdown as well. i have met few property managers of residential propertys who actually earned their money.

i suspect the auction slug may not cover the extra rental income.

el 12:56 pm 27 Sep 06

Congratulations go to Peter Blackshaw for finding a new way to be an *even lower* form of scumbag.

Hooray for rich property inverstors!

Thumper 12:23 pm 27 Sep 06

frankly I think it is unethical.

Peter Blackshaw ought to hang their head in collective shame.

VYBerlinaV8 12:09 pm 27 Sep 06

Auctioning of rental properties is probably a bit unfair. It may not be so good for many landlords either, as people are likely to get emotional and overcommit then not be able to make the rental payments later, leading to action that costs both landlord and renter.

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