Rental advocacy bodies, welfare groups says rent bidding reform could increase prices

Top rental and welfare advocacy groups have warned that proposed rental reforms to end rent bidding could have the opposite effect and increase prices.

Top rental and welfare advocacy bodies have warned the government that proposed legislation to end rent bidding will have the opposite effect and potentially increase prices and exacerbate renter pain.

This comes after the NSW government attempted to enact its first tranche of rental reforms aimed at stamping out rental bidding, with the legislation currently referred to a committee for further review.

While the proposed laws would require agents to notify all applicants if someone offers above the advertised rent, welfare and rental advocacy groups argue it will “legitimise” rental bidding and lead to “unintended consequences” in a rental market that’s already at crisis point.

The organisations have instead called on the government to enact laws which would prevent landlords, agents and tenants from offering, soliciting or accepting rents higher than what is advertised.

Dozens of Sydneysiders lined up for a rental inspection in Sydney’s inner-city suburb of Surry Hills in March. Picture: NCA NewsWire/ Nicholas Eagar

Led by Homelessness NSW and the Tenants Union of NSW, the lengthy list of signatories also includes St Vincent de Paul Society of NSW, the Redfern Legal Centre, Shelter NSW and the Older Women’s Network NSW.

In a letter to the committee, they argued the draft legislation will “have further negative impacts on tenants and the rental market,” and exacerbate rent bidding.

“It is a practice that can create unfair competition and increase rental prices in a tight market – especially problematic in a high-inflation environment that we are currently in,” the letter read.

“It can also lead to discrimination, exploitation, and insecurity for tenants, especially those who are vulnerable or disadvantaged.”

Homelessness NSW CEO, Trina Jones – who will give evident at the committee’s first hearing on Friday – said the “unscrupulous practices of rent bidding” affects vulnerable people the most.

This comes as SQM research reports Sydney rents rising by 25.3 per cent in the last three years, with rental vacancy rates also at a nine-year low.

“The (current draft legislation is doing is) effectively legitimising a rental bidding process,” she said.

“We know that rental vacancies for those on low income are between zero and 1 per cent.

“We know that if you can‘t afford to rent, sooner or later you’re going to be homeless.”

CEO of advocacy group Homelessness NSW feared the proposed rental bill could exacerbate the rental crisis. Picture: NCA NewsWire/ Andrew Henshaw

Ms Jones, from Research from Mission Australia, said demand for homelessness services has increased by 26 per cent over the last three years.

“That group is changing, and increasingly, we’re seeing vulnerable people but also people who are gainfully employed, now falling into homelessness,” she said.

“The lack of available affordable rentals and the lack of available affordable housing is driving homelessness.

“When rents are outstripping wages, it becomes very high risk for people to become homeless.”

Greens MP Jenny Leong, who is a member on the inquiry, backed calls for a rule which would cap rents at the listed price.

The last thing renters in NSW need is for rent auctions to be entrenched when they’re already dealing with enormous rental stress.

“We can give renters desperately needed security and transparency by ensuring that all rentals have a maximum fixed price when advertised, so they‘re not wasting their time or being stretched beyond their means,” she said.

“We welcome the government’s willingness to listen to community concerns and look forward to working with all members of Parliament to end the harms caused by rent bidding.”

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

“Labor have referred the bill to a committee to clean up their mess, but they’ve tied the committee to a rushed deadline and limited its ability to make genuine improvements to the bill,” he said.