An Australia-first proposal to make rent bidding transparent has been temporarily shelved amid concerns that it may lead to further inflation.

The move comes after a NSW inquiry raised fears that banning secret rent bidding could lead to legal rental auctions and further drive up prices.

In response to concerns from upper house crossbench MPs, the NSW government has decided to postpone the ban for now to focus on passing other rental changes through the parliament.

Acknowledging that questions remain on implementing the ban, Fair Trading Minister Anoulack Chanthivong emphasised the need to avoid hindering areas of broad agreement.

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However, advocacy groups such as the NSW Tenants’ Union, Homelessness NSW, and the NSW Council of Social Service cautioned that banning secret rent bidding may worsen the situation by “encouraging a transparent, regulated rental auction process.”

Tim McKibbin, CEO of the Real Estate Institute of NSW, echoed concerns about potential adverse outcomes, suggesting that the ban could prompt more landlords to shift their properties to the short-term rental market, thereby reducing housing stock available to tenants.

While the opposition to rent bidding is divided, with some advocating for government intervention and others cautioning against it, Independent MP Alex Greenwich welcomed the decision to pause the proposal.

He emphasised the importance of consulting with the sector to ensure the right approach is taken, pointing to the ACT as an example where property owners must justify rent increases.

The NSW government’s legislation, which will still impact rent bidding, includes banning third-party platforms and owners from soliciting bids.

Additionally, it empowers the new tenant advocate, the NSW Rental Commissioner, to gather pricing data from agents.

The government plans to introduce further legislation to ban no-fault evictions and make it easier for tenants to have pets.

Amidst soaring rental costs in Sydney, with a 13% increase for rental properties and a record-breaking 19.1% surge for median units in the past year, the government aims to address various rental issues through its legislative changes.