Minns breaks promise to end secret rent bidding over criticism it would drive up prices

The Minns government has been forced to drop a key plank of its election promise to tackle rental affordability after a wave of criticism from experts who warned it would instead drive up prices and lock tenants into leases they cannot afford.

In a major concession, NSW Premier Chris Minns has decided to pull the much-maligned plan to end secret rent bidding, after it became clear the minority government would not be able to pass the bill through parliament.

Premier Chris Minns has been forced to drop a key plank of his rental reform bill after experts warned it would drive up prices.Credit: Rhett Wyman

The bill was referred to a parliamentary committee last month after crossbenchers raised concerns with new rules that would have required real estate agents to tell applicants when they received a higher bid for a rental property.

Last week the committee heard evidence from a range of experts including tenancy advocates and real estate groups who warned it would spark bidding wars and push Sydney’s already over-heated rental market into overdrive.

In the face of that criticism, the government said it would drop the rent bidding elements of the bill in order to push ahead with other components of the rent relief legalisation including its portable bond scheme.

The decision is a major win for the expanded crossbench, and is a sign of the challenge facing Labor as it grapples with minority government in both chambers of parliament.

“We have been upfront: the minority parliament won’t support every bit of every bill, and we’ll be pragmatic working through that,” Minns said.

“This decision means we can get on with the rest of our rental reform agenda, including ending ‘no-grounds’ evictions.”

Before the election the government said it wanted to end secret rent bidding because it “encourages renters to continually outbid each other on price to secure a home, driving up the costs of rent”.

But criticism of the bill has come from across the industry. Leo Patterson Ross from the NSW Tenants Union compared the changes to legalising speeding “because at least everyone will know how fast we’re travelling”. Raine & Horne’s head of property management Maria Milillo also warned that it would “drive prices higher”.

It also faced opposition from inside Labor. In a submission to the committee the Young Labor Left warned the government’s bill risked “perverse” outcomes for tenants, saying that it would “entrench a flawed auction model in private rentals”.

They instead called for laws to be introduced to ban agents or landlords from accepting offers above the advertised price.

The government said it would “pause” the rent bidding portions of the bill until the appointment of a new rental commissioner – another plank of Labor’s election platform – who will be charged with increasing transparency in the market. Interviews for that role will begin this week.

The architect of the bill, Minister for Better Regulation Anoulack Chanthivong, conceded there were “questions about how a ban on secret rent bidding will be implemented”.

“We can’t let that put a handbrake on areas where there is broad agreement,” he said.

Besides the portable bond scheme, the bill will also close loopholes on an existing ban on soliciting rental bids so that it applies to third-party platforms and owners, not just real estate agents, while also handing powers to the new rental commissioners.

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