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The state’s recent reforms have increased oversight of the rental sector and penalised parties engaging in illegal rent bidding practices.
The NSW government’s first ever Bidding in the NSW Rental Market report revealed that the state’s increased oversight of rental property listings has effectively eliminated rental bidding practices.
The report’s analysis, conducted by NSW Fair Trading and the Department of Customer Service’s Data Analytics Centre, investigated the amount of rent bidding, underbidding, and variable pricing on rental properties occurring within the state.
As part of the state’s crackdown, NSW Fair Trading has issued 145 penalty infringement notices totalling over $157,000 between May and December last year to agents who breached their obligations under the Residential Tenancies Act 2010 NSW and associated laws.
Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, said the report was important as “more people than ever are renting and that they are renting for longer”.
“That’s why the government is committed to supporting the rental market, so tenants see it as one that offers security, and quality, while providers view it as one they can invest in with certainty and viability,” Chanthivong said.
In December 2022, the NSW government introduced amendments to the Property and Stock Agents Regulation 2022, which required agents to advertise properties with fixed prices and prohibited solicitation of offers above the advertised amount.
CoreLogic’s rental listing data from 2022 showed that upon commencement of the regulatory changes in December, the percentage of listings without a fixed price dropped from 17 per cent to 5 per cent over three months.
This ban on solicited rent bidding was expanded in August 2023 to include landlords and rental platforms.
It also prevented using variable price ranges and flexible ‘offers over’ terminology for rental prices on major listing programs.
To further bolster the rental reforms, the recently launched Rental Taskforce within NSW Fair Trading is also expected to use inspections, audits and “rental blitzes” to prevent and act on rental law violations.
NSW rental commissioner Trina Jones said the state’s regulatory efforts and greater crackdown on rental bidding had effectively stamped out the practice across the state.
“NSW Fair Trading’s regulatory measures have effectively eliminated solicited rent bidding through rental listings, with compliance rates now reaching above 99 per cent,” Jones said.
Additional NSW rental reforms passed in 2024 are expected to further bolster renter protections by banning no-fault evictions, limiting rent increases to once per year, and strengthening laws around free rent payment options.
The Real Estate Institute of NSW took a contrary position on the efficacy of the government’s rental reforms, and said the report highlighted that the government had its “priorities all wrong in tackling the rental crisis”.
The institute’s CEO, Tim McKibbin, said the report demonstrated that the government was either “unwilling or incapable of prioritising reforms which might actually begin to turn the crisis around”.
“Without any apparent subtlety, this report is designed purely for the government to claim its rental bidding reform has been a success,” McKibbin said.
“In reality, it has changed nothing and solved nothing.”
“Rent bidding is, and has always been, driven by desperate tenants,” he added.
McKibbin also said the report showed the government did not properly understand the rental market.
“For instance, it refers to landlords as ‘property providers’, as if it’s the job of these people to provide subsidised housing,” McKibbin said.
“Landlords are investors. People have many options to choose from when investing. Shares, bonds, commercial property, and other investments don’t carry the same burdens, nor the same demonisation, as residential property.”
According to McKibbin, new reforms would not only worsen conditions for landlords, but also further weaken investor sentiment regarding residential property in NSW.
“Making it less attractive for people to invest in residential property, simply drives investment from the market. For tenants, the situation looks set to worsen,” he concluded.
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