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The Guardian - AU
The Guardian - AU
National
Tamsin Rose

‘Pouring fuel on the fire’: fear NSW’s move to ban secret rental bidding will drive prices up

For lease signs in front of a block of flats
Rents in New South Wales will be pushed higher if proposed reforms are enacted, renters advocates have warned. Photograph: Mick Tsikas/AAP

Already struggling renters could be subjected to “rental auctions” that would push soaring prices even higher if the New South Wales government’s reform package is passed, experts say.

While moves towards a portable bonds scheme have been welcomed, the plan to end “secret” rent bidding has caused alarm among tenants advocates who say the measure designed to protect the state’s 2 million renters would cause problems.

Agents are already banned from asking applicants to offer rental rates higher than the listed price, but they are permitted to accept unsolicited offers.

The government’s proposal would force agents to disclose offers above the listed price to other prospective tenants, which could give them a chance to make higher bids.

The executive director of advocacy organisation Better Renting, Joel Dignam, said it would effectively result in “rental auctions” and make the situation even worse.

“This will really just be pouring fuel on the fire,” he said.

“It will fix the problem of not knowing if others are offering higher rents, but it will really worsen the problem of bidding up rent prices, it will actually facilitate it.”

He said the government should instead move to ban landlords accepting rents above the advertised price.

The premier, Chris Minns, dismissed that suggestion on Wednesday and said he believed his was a “better model”.

“There’s going to be an element of dynamic markets when it comes to rental properties,” he said.

“The problem that we’re facing at the moment is that scores of young people are wasting hours and hours going from one property to the next, unaware that secret rent bidding is taking place.”

The head of the state’s tenants’ union, Leo Patterson Ross, said the law could be used by agents to drive up the price on a property by presenting offers with the aim to see counterbids from applicants they were never planning to approve for a property.

“You’re essentially in an auction, but without any of the transparency or regulation around an auction,” he said.

“You’re dealing with people who are increasingly very anxious and very worried about where they’re going to be sleeping, rejected from property after property. They are being essentially coerced into these offers of higher and higher prices.”

The state’s better regulation minister, Anoulack Chanthivong, insisted it would empower renters.

“It’s about transparency and fairness,” he said.

The minister said the policy’s impact would be monitored by the yet-to-be-appointed rental commissioner but would not commit to a review timeframe.

The opposition leader, Mark Speakman, said he would look at the government’s plan carefully.

“More and more people are being priced out of the housing market and are long-term renters and we’ve got to make sure that the conditions suit them,” he said.

While welcoming the focus on renters, Greens MP Jenny Leong expressed “serious concerns” that the rent bidding plan would entrench rental auctions.

“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.”

She said her party would work with the government to improve the legislation.

The Greens on Wednesday gave notice of their own bill to freeze rents – a move that Minns has repeatedly ruled out.

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