Tenants groups are calling for landlords to be banned from accepting offers for rentals higher than the advertised rate after the New South Wales government announced plans to outlaw rental bidding.
The change announced on Monday will bring NSW into line with Victoria, Queensland and Tasmania, where attempts have been made to stamp out a practice that sees landlords or agents invite or suggest prospective tenants to increase their offer of rent to be the successful applicant.
Dominic Perrottet said “an advertised rental fee should be just that”.
“The search for a rental property is tough enough without it turning into a bidding war that pushes people beyond their comfort level,” the premier said.
The changes will apply to all listings posted from 17 December.
Under the new regulations, agents will be banned from asking a tenant to offer a higher price than the listed amount. Agents will also be stopped from advertising a property without an exact amount specified.
If a tenant is encouraged to increase their offer, they will be able to report it to the Department of Fair Trading, with agents facing fines of up to $5,500 for an individual and $11,000 for a company.
Leo Patterson-Ross, the head of the NSW Tenants’ Union, said while it was important to stop the formal soliciting of bids over the advertised price, the impact would be negligible unless lessors were banned from accepting unsolicited higher offers.
“If we only address the [soliciting], the experience from these other states and territories tells us that we have not addressed rental bidding and it will continue,” he said.
“We’d really like to see a restriction on accepting a rent over the advertised price so you can negotiate down if you’ve pitched too high but you can’t bid up.”
Joel Dignam, the executive director of advocacy organisation Better Renting, said renters would continue to feel pressure to make offers higher than the advertised price until it was outlawed, due to the lack of supply across the state.
“It shouldn’t be an entirely free market when it comes to something as essential as housing,” he said.
“Having transparency and fundamental fairness around people knowing what the property is on the market for is the least we should expect for housing.”
Asked about unsolicited offers above the asking price, the fair trading minister, Victor Dominello, said they were “OK”, which would keep NSW in line with the other states.
“It takes the hard edge off it,” Dominello said.
“There’s no perfect solution. Government involving itself in the market is heavy handed. We all accept that. But we need to put some level of protection for the extreme practices.”
Perrottet agreed, saying: “You can’t let perfection be the enemy of the good.”
The NSW Greens’ housing spokesperson, Jenny Leong, welcomed the changes while pushing for further action to protect renters.
“We reiterate our call to end unfair no-grounds evictions in NSW – something we know a lot of people are facing right before Christmas,” Leong said.
“We have also been calling on the government to respond appropriately to the rental crisis by immediately freezing rents.”
With just months before voters head to the polls, Leong said the Coalition government was more focused on votes than “addressing the housing crisis in this state”.
The opposition leader, Chris Minns, said renters had become “the forgotten people when it comes to legislative reform” and promised that a Labor government would change that.
“If we win the election, Labor will introduce a portable bond scheme, we will establish a rental commissioner in NSW, and we will end the idea of secret bidding on properties,” he said.
