NSW puts the brakes on rental auctions
Government reform to protect “vulnerable“ renters
Effective December 17, the NSW government will prohibit ‘rental auctions’ as part of its regulate the state’s rental market.
Announcing the reform, Minister for Customer Service and Digital Government, Victor Dominello indicated the changes proposed under the new ruling will see real estate agents required to advertise a rental property with a fixed rental price.
The ban will include a prohibition on rental property advertised ‘by negotiation’, ‘inviting offer’ or a ‘price range’.
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Prospective tenants who are encouraged by real estate agents to up their offers will be able to report those agents to the NSW Department of Fair Trading where they could face fines of up to $5,500 for an individual and $11,000 if a corporation.
The move is seen as tackling ever-increasing rentals which have been impacted by increased interest rates.
Minister Dominello said the government had taken into consideration the needs of investors who may be struggling to pay their mortgage as interest rates spike.
“We also have to balance the fact that a whole lot of people went into the market last year, bought a property as their nest egg, interest rates are going up and they need to service that,” he said.
However, would-be renters will still be able to offer higher prices to those advertised in order to secure a property.
The Minister said he accepted there is no perfect solution and this reform is about taking the hard edge off.
The ABC quoted Premier Dominic Perrottet as saying the outlawing of solicited rent bidding would help prospective tenants secure housing in a “fair way”.
The Premier said it was time to put an end to this practice and give more people security and certainty so they can plan for their future, adding the search for a rental property is tough enough without it turning into a bidding war that pushes people beyond their comfort level.”
The Real Estate Institute of NSW CEO, Tim McKibbin was quoted as saying the ban won’t solve the rental crisis and is a “pure distraction away from the underlying problem”, namely the supply of rental accommodation.
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