NSW rent reform delayed, referred to inquiry due to rent bidding concerns

One state’s first suite of rental reforms has stumbled at the first hurdle and will be referred to an inquiry over concerns it could increase the problem.

NSW’s first suite of rental reforms will be referred to an inquiry. Picture: NCA NewsWire/ Nicholas Eagar

NSW’s first suite of rental reforms has stumbled at the first hurdle and will undergo a parliamentary inquiry over concerns it could increase rent bidding despite clauses to explicitly ban the act.

While the Bill introduced to parliament earlier this month aimed to end solicited rent bidding, it also required agents to notify all applicants if they received a bid higher than the advertised price.

The Bill will now be referred to an inquiry after crossbenchers, including Greens MP Jenny Leong and Sydney MP Alex Greenwich, expressed concern that it could inadvertently “entrench” a system of rent bidding.

Ms Leong welcomed Labor’s “willingness to listen to community concerns” and improve the legislation. This comes as the Greens have given notice to introduce a Bill to enact a two-year freeze on rents, slated to be introduced later this year.

“It’s great news for renters that the government has listened to the concerns and put a pause on rushing through their proposed laws that would make NSW the first state to entrench rental auctions,” she said.

“This inquiry is an opportunity to demonstrate the real harms being caused by rent bidding, both in its secrecy and in how it is massively driving up the cost of rent.

“Every day renters are struggling to find an affordable place to live in a brutally competitive rental market or being hit with unfair rent hikes.”

This inquiry is an opportunity to demonstrate the real harms being caused by rent bidding, both in its secrecy and in how it is massively driving up the cost of rent.

— Jenny Leong MP 梁珍妮 (@jennyleong) May 23, 2023

NSW Tenants Union chief executive Leo Patterson Ross, who said the original Bill had the potential to essentially legalise rental auctions, hoped it would completely cull rent bidding.

“We should be considering whether the better solution is to actually end rent bidding. That when they see the price on the advertisement, they can feel confident it will be the price on the tenancy agreement,” he said.

If the new Bill didn’t go that far, he said there would need to be “stringent safeguards” to protect vulnerable tenants who were “desperate for a home”.

The rental crisis remains one of the key issues for the NSW government. Picture: NCA NewsWire/ Nicholas Eagar

When it comes to improving transparency on the renting process, Mr Patterson Ross said there was wide scope to ensure people “get assessed on their own merits” and weren’t rejected from tenancies on unfair grounds.

“The other thing this process has shone a light on is that what people would really like is transparency and knowing why they are unsuccessful,” he said.

“For example, are they being outbid because of characteristics like they have a better job and better income?”

He likened the current process to The Hunger Games.

“I think opening up examination of the application process would be really healthy and will give people better guidance around why they are being knocked back,” Mr Patterson Ross said.

“It will probably show why they are being knocked back is not a fair or good reason. We have a system that is competitive and it’s not the most equitable way to approach housing.”

Sydney's rental crisis has reached new heights as renters complain of unfair price hikes. Picture: NCA NewsWire/ Jeremy Piper

Fair Trading and Better Regulation Minister Anoulack Chanthivong committed the parliament to take “practical, pragmatic action” to relieve pressure on renters.

“The pressure on renters is extreme, so we can’t kick the can down the road. A quick, targeted inquiry will help iron out the finer details and get this passed as soon as possible,” he said.

“We’re already working on the next tranche of our rental reforms, including getting the rental commissioner in place and working through the detail when it comes to making it easier for renters to have pets and ending no grounds evictions.”

Opposition spokesman for fair trading, Tim James accused the government of rushing the legislation through parliament.

“It’s clear the Government got it wong and risked driving up prices and worsening access to properties for renters,” he said.

“Finding a rental home is tough enough as it is without the added uncertainty of having to engage in a bidding war that could cause rent prices to surge.

In addition to extra transparency to rental applications, the NSW government has also committed to extra reform to end no grounds evictions, loosen rules around pet ownership in leased homes and enhance data protection for renters.