Under regulations that come into effect on Saturday, 17 December, real estate agents will be prohibited from asking tenants to offer higher rents in New South Wales.
Tenant groups in NSW say the move to ban rental bidding needs to stop unsolicited offers, calling for a ban on landlords accepting offers for rentals higher than the advertised rate.
The change, which will bring NSW into line with Victoria, Queensland and Tasmania, aims to stamp out a practice where landlords or agents invite or suggest prospective tenants increase their offer of rent to be the successful applicant.
NSW Premier Dominic Perrottet said, “an advertised rental fee should be just that”.
He added, “the search for a rental property is tough enough without it turning into a bidding war that pushes people beyond their comfort level.”
How the ban on rental bidding will work
The changes to rental bidding regulations in NSW will go into effect from Saturday, 17 December.
Under the new regulations, agents will be prohibited from asking tenants to offer a higher price than the listed amount and barred from advertising a property without an exact amount specified.
From 17 December, if you’re encouraged to increase your offer, you can report it to the Department of Fair Trading.
Agents will face fines of up to $5,500 for individuals and $11,000 for companies.
Groups call for change
Leo Patterson-Ross, the head of the NSW Tenants’ Union, said that while it’s important to stop the formal soliciting of bids over the advertised price, the impact would be minimal unless landlords were banned from accepting unsolicited higher offers.
Joel Dignam, the executive director of the advocacy organisation Better Renting, said that renters would continue to feel pressure to make offers higher than the advertised price until it was banned due to the lack of housing supply across the state.
He added that “it shouldn’t be an entirely free market when it comes to something as essential as housing” and that “having transparency and fundamental fairness around people knowing what the property is on the market for is the least we should expect for housing.”
NSW Fair Trading minister Victor Dominello said unsolicited offers above the asking price were “OK”, which would keep NSW in line with the other states.
He added that “it takes the hard edge off it” and that “there’s no perfect solution” but that the government needs to provide “some level of protection for the extreme practices.”
Jenny Leong, the housing spokesperson for the NSW Greens, welcomed the changes to the rent bidding regulations while pushing for further action to protect renters.
She said that the Greens “reiterate our call to end unfair no-grounds evictions in New South Wales – something we know a lot of people are facing right before Christmas” and called on the government to “respond appropriately to the rental crisis by immediately freezing rents.”
Ms Leong criticised the government for being more focused on votes than “addressing the housing crisis in this state.”
Opposition leader Chris Minns said that renters had become “the forgotten people when it comes to legislative reform” and promised that a Labor government would introduce a portable bond scheme, establish a rental commissioner in New South Wales, and end secret bidding on properties.