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“An advertised rental fee should be just that,” claimed NSW Premier Dominic Perrottet as he announced the regulatory changes.
Banning the practice of rent bidding will “give more people security and certainty so they can plan for their future”, the Premier added.
Rent bidding — or where a landlord or agent invites, suggests, or asks tenants to increase their offer for rent for a property in order to secure it — will be outlawed through urgent changes to regulations under the Property and Stock Agents Act 2002, with the updates set to apply to all new listings from Saturday, 17 December.
The state capital, Sydney, was the only major Australian city to record rent increases in October, according to data from CoreLogic, as the city held firm as the second-most expensive rental market in the country, with tenants paying $665 per week on average, while vacancy rates across the city were 1.3 per cent.
Given these factors, the Premier acknowledged that “the search for a rental property is tough enough without it turning into a bidding war that pushes people beyond their comfort level”.
Minister for Fair Trading Victor Dominello believes the changes cater to the needs and interests of all stakeholders, including renters, landlords, and real estate agents.
“It can be very distressing for prospective tenants who have submitted a rental application only to be told to increase their offer to improve their prospects of securing a property,” he said.
“From this weekend, agents will be prohibited from inducing a prospective tenant to offer an amount higher than that advertised for the property.”
He added the changes include provisions that dictate “real estate agents cannot advertise a property unless it specifies the rent payable for the property”.
A government press release also explained that “NSW Fair Trading will work with real estate agents and landlords to ensure they are aware of and comply with the new regulations”.
Last month the South Australian government enacted a process of reviewing its rental laws, which included plans to discuss the practice of rent bidding with housing stakeholders such as tenants and landlords, although the consultation period is not set to conclude until 16 December.
The government’s decision to implement the changes comes days after the Real Estate Institute of NSW (REINSW) berated them for playing the blame game regarding the state’s rental crisis.
“The ongoing attacks on people who work in the industry and who own an investment property are a shameful attempt by government to distract tenants from its own shortcomings, namely its failure to support the supply of homes for people to rent,” institute chief executive officer Tim McKibbin said.
“The NSW government must come clean, stop spreading politically popular lies, and show tenants some respect.”
Following Victoria, Queensland, and Tasmania, NSW becomes the fourth state to implement the legal annulment of rent bidding.
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