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Rental crisis: Desperate students turn to Chinese brokers and pay price

With thousands of Chinese students arriving in Australian cities in the midst of a rental crisis, many turn to Chinese-based brokers promising to help them find a place to call home. Operating on Chinese social media, out of sight of mainstream scrutiny, the deals they offer sometimes come at a high cost. Special investigation by Gwen Liu.

Rental crisis: Desperate students turn to Chinese brokers and pay price

“People come without knowing their rights … they’re vulnerable. Often students are so desperate for the accommodation that they can be exploited": Farah Farouque, director of community engagement from Tenants Victoria. Photo: Gwen Liu

Investigation by Gwen Liu
 

International students desperate to find accommodation in Australian cities are forking out hefty payments to online Chinese-language “property brokers” who claim they can help secure leases in the tight rental market.

In addition to paying upfront service fees to the brokers, some impacted students have then discovered they’re paying rent at an inflated rate, or are locked into a contract requiring them to make several months of advance payments, documents seen by The Citizen show.

The self-styled brokers operate largely out of sight of mainstream scrutiny across popular Chinese social media platforms WeChat and Xiaohongshu (Little Red Book).

Industry insiders are concerned that the activities of some of these agents are exploitative, preying on vulnerable students’ lack of local connections and knowledge.

Senior vice-president of the Real Estate Institute of Victoria, Jacob Caine said charging upfront fees was outside normal industry practice.

“I’ve just never heard of these brokers,” he said, responding to cases outlined by The Citizen. “But I find that highly questionable as a practice.”

“My gut instinct on these things is they feel shady, and they feel like a really easy way to rip people off.”

In June, Vicky*, a 23-year-old graduate student at the University of Melbourne, and her partner Carolyn*, 27, paid $268 to WhereMove, a business with a Chinese phone number on its website advertising itself as a rental broker for properties in Melbourne, Sydney, Brisbane and Adelaide. It described its services in an email as a “renter proxy company”.

The couple were hoping to move to Melbourne from China before the start of semester two in July. After months researching the rental market, they were anxious that without local references they wouldn’t secure a lease in the highly competitive market.

“International students like us without any Australian renting records and still outside the country barely have a chance of getting an apartment,” Carolyn said, who asked not to be named due to fears about securing future rentals.

She found WhereMove on Chinese social media platform Xiaohongshu (Little Red Book), and communicated with the broker through WeChat.

“They told us that they can help us with the renting application, and they have partnerships with local real estate agencies to increase the chances of success.”

Until late July, WhereMove had 12 official “partners” listed on its website, including nine real estate agencies, internet service provider OCCOM and two student accommodation providers, Scape and The Switch.

After the “partners” were contacted by The Citizen, WhereMove deleted all but OCCOM, who were still on its website as of Thursday, 10 August. Four real estate agencies – Gem Reality, KIN Real Estate, DaVita Real Estate, ICARE – denied any relationship with WhereMove. Scape, Australia’s largest purpose-built student accommodation owner, replied that “looking at our partners list, they don’t seem to be a partner”, and have not clarified further.

Screenshots of an exchange between Carolyn and the broker shows WhereMove asking about the couple’s willingness to offer higher prices or pay a few months’ rent in advance to improve their competitiveness given the number of applications.

Rental law reforms introduced in Victoria in 2021 explicitly ban “inviting” or “soliciting” offers of rent higher than the advertised price. The Residential Tenancies Act 1997 also bans demands of advance rent over one month (excluding properties renting for more than $900 per week in Victoria).

As these rental reforms were designed to apply to landlords and their agents, it is unclear whether they apply to brokers or similar agents. The Citizen therefore does not suggest WhereMove or any other broking agency has breached the law.

A spokesman for WhereMove said that the company knew rent bidding was illegal in many Australian states and territories.

“We provide the suggestions based on the current rental market but will never force or mislead [our customer] … to offer a higher price or pay the upfront to take the property,” he said responding via email, adding “though we know that is a common phenomenon in the rental market in many states of Australia”.

“WhereMove is a proxy of the renters and we [are] also a collaborator of the local real estate companies. No one can guarantee success.”

The couple agreed to pay three months’ rent in advance for two preferred properties, but neither application was successful.

WhereMove is just one of dozens of middleman companies advertising property broking services in Australia on Chinese language social media. Other active operators include ClozHome and SpaciousHome.

While it is unclear how and if rental laws apply to broking agents, and there is no implication by The Citizen that these companies have acted illegally, industry and educational leaders are concerned about the potential for exploitation of vulnerable international students in the context of Australia’s accommodation crisis.

“Sometimes it is very hard for Australian government authorities to really discover what’s happening behind the scenes or behind closed doors,” said Phil Honeywood, the Chief Executive Officer of the International Education Association of Australia (IEEA). There was potential risk for what he described as “same-culture exploitation”.

Honeywood said Chinese students relied heavily on local media for services and information and greater regulation was needed to inform and safeguard them.

A recent federal inquiry into Australia’s international education sector heard students were being taken advantage of on social media while on and offshore via groups offering to act as a “middle man” to secure accommodation.

Dr Angela Lehmann of international education experts The Lygon Group told the inquiry that Chinese students were at particular risk of accommodation scams.

“We hear reports of students saying that someone on Chinese social media, WeChat, Chinese social media … offers to have someone in Australia view a property or sign up a property before they leave China. This opens up a world of risk, I think, for students,” Lehmann said.

Monash University student Ray* paid ClozHome about $750 upfront to help secure a lease on a Melbourne apartment. His application was successful and he entered a contract with a real estate agency based in Australia.

Shortly after moving in, the 21-year-old student and his roommate – also from China – received a nearly $17,000 bill seeking payment of six months’ rent in advance from the rental agency. The amount was due in two days.

Ray said when preparing his application, ClozHome suggested he offer a few months payment in advance, but he rejected the idea.

“I thought the rent was paid monthly, so I signed the leasing contract directly without double checking,” he said. Ray and his roommate had to pay around $34,000 rent within three months.

A spokesperson for ClozHome, whose parent company is registered and based in China, told The Citizen via email that “customers have the full right to choose their apartment and sign the contracts.

“As for the disputes between the tenants and the property managers after moving in, we will also cooperate fully in regulating them.”

Ray said when he asked Clozhome about the contract, the broker replied via text: “It is written on the contract … It has nothing to do with us.”

Kai, 23, another Chinese student studying in Melbourne, paid about $500 as an upfront fee to China-based broker  SpaciousHome to secure the lease on an unfurnished one-bedroom apartment in Melbourne in February.

His rent was set at $600 a week. He later discovered that five other one-bedroom unfurnished apartments in the same building were listed at $500 a week or less on Domain.com.au in April.

A rental consultant from SpaciousHome said the company “never force tenants to select our service, we just help tenants find their home in Australia”.

All the Chinese students interviewed said while they each paid the Chinese-language brokers a service fee, they didn’t sign any contracts directly with the brokers.

Farah Farouque, director of community engagement from Tenants Victoria, said international students grappling with the tight rental market needed greater support from their universities.

“People come without knowing their rights … they’re vulnerable,” she said. “Often students are so desperate for the accommodation that they can be exploited.”

In her evidence to the parliamentary inquiry, Lehmann urged more scrutiny of Chinese social media.

“One of the ways to deal with this situation, I think, is to understand and to see where this is going on, on Chinese social media, and also to be providing accurate and clear information in language on the channels that students use.”

*Pseudonyms used at the request of all interviewees.

This investigation is co-published with Crikey.com.

 

About The Citizen

THE CITIZEN is a publication of the Centre for Advancing Journalism. It has several aims. Foremost, it is a teaching tool that showcases the work of the students in the University of Melbourne’s Master of Journalism and Master of International Journalism programs, giving them real-world experience in working for publication and to deadline. Find out more →

  • Editor: Jo Chandler
  • Reporter: Qiyun (Gwen) Liu
  • Audio & Video editor: Louisa Lim
  • Data editor: Craig Butt
  • Editor-In-Chief: Andrew Dodd
  • Business editor: Lucy Smy
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