Yahoo Finance Labor’s move to help renters questioned
A tenant advocate says there’s a “real risk” proposed legislation to end rent bidding could have the opposite effect and increase rental auctions and further inflate prices.
The NSW government on Wednesday moved a bill that would require agents and landlords to notify all applicants if they receive a bid higher than the advertised price on properties.
However, NSW Tenants Union CEO Leo Patterson Ross says more consideration is needed.
“Transparency in the rental sector is a good thing and something we support, but renters don’t want transparency that leads to a higher prices and a rental auction,” he said.
“We understand and encourage parliament to consider how to ensure that if banning the secret rental bidding part is proceeding, to also ensure how rental auctions don’t occur.”
In an ideal scenario, the NSW Tenants Union proposed policy guard rails in which a property must be leased for, or less than, the price advertised.
Mr Patterson Ross said it was a “practical solution” to the issue.
“You (shouldn’t be able to) enter into an agreement that is higher than the advertised price,” he said.
“Renters put in a lot of time energy and effort looking into properties only to find out the property gets leased at a cost that’s a lot higher than advertised.
“The practice itself is the frustrating process.”
Greens Newtown MP Jenny Leong said she had serious concerns the bill will have “significant unintended consequences”.
“When it comes to rent bidding, it shouldn’t matter whether it’s solicited or unsolicited, secret or out in the open, the practice itself is driving up the cost of rent and needs to be banned outright,” she said.
“Renters are already struggling with the soaring cost of rent and a brutally competitive market.
“The last thing we should be doing is entrenching a system of renting to the highest bidder.”
However, Premier Chris Minns said the bill would create a more “transparent market”.
“There’s going to be an element of dynamic markets when it comes to rental properties,” he said.
“I’m aware that secret rent bidding is taking place and soliciting to a particular buyer to up the rent above the advertised price is leading to the inflation on rental properties.
“One of the ways that markets fail is that there‘s an unequal in supply of information between market participants.”
Stronger protections to be given to renters
The bill introduced on Wednesday also cemented a ban on solicited rent bidding to also include owners and third parties.
NSW Better Regulation and Fair Trading Minister Anoulack Chanthivong said this would close a “loophole” that previously only barred real estate agents from the act.
“Agents are already banned from asking prospective tenants for more rent than what the property is advertised, but landlords and third parties aren’t, so we’re closing that loophole,” he said.
The first steps will also be drafted to create a portable bond scheme that transfers the bond from one property to another, reducing a significant out-of-pocket cost for applicants.
Mr Minns said it was a “sensible cost of living measure to help ease the pressure on the more than 30 per cent of people in NSW currently renting”.
“Anyone who rents in Sydney knows just how anxious and challenging a process it can be to find suitable accommodation, never mind the significant costs associated with moving,” he said.
“These changes will create a fairer rental regime in this state by providing greater certainty as well as flexibility for both renters and owners.”
The legislation targets some of the election promises made by NSW Labor to renters prior to winning government. Extra reform to end no grounds evictions, loosen rules around pet ownership in leased homes and data protection for renters is also under way.
The government is also in the process of hiring a rental commissioner to advocate for tenants.
However, the government has ruled out rent freezes despite Sydney rents increasing by 25.3 per cent in the past 12 months, and 7.1 per cent in the last quarter alone.
SQM research found two-bedroom units had the most inflated prices, with rents increasing by 30 per cent in the last 12 months to May 4. Houses reported an increase of 21.1 per cent.
Vacancy rates have also fallen to a nine-year low.
Peak body for agents, the Real Estate Institute of NSW, reports vacancy rates in Sydney dropped to 1.3 per cent in March and were only marginally better in the Hunter (1.6 per cent) and Illawarra (1.8 per cent) regions.
Mr Chanthivong said the proposed measures would ease pressure and increase rental stock.
“The message at the last election was clear: Renters in NSW didn’t feel their voice was being heard,” he said.
“Our focus is on getting the balance right by implementing responsible reforms that reduce stress and pressure for renters while also looking at ways to drive new supply into the market.”
Housing and Homelessness Minister Rose Jackson said the updated and modernised laws were needed as more people became lifelong renters.
“There is a relationship between our unfair rental laws and increases in housing insecurity,” she said.
“We know our current rental laws aren’t working, this is a step closer to improving renters’ rights for the people of NSW.”
