Rental affordability in NSW has become a hot issue and with a new Labor government in power, there are significant changes to the industry being considered and new laws being adopted. Demand for rental properties in recent years has surged, causing an increasing competitiveness in the market. One of the consequences of this cutthroat environment has been the increase in the practice of rental bidding. Rental bidding occurs when potential tenants try to outbid each other, offering rental payments higher than the advertised price. Whilst this practice has been lucrative for landlords, it also opens up the market to vulnerable tenants being unable to sustain the increased rents in the long term, causing instability for all. With one third of people in NSW renting and one in five renters living in poverty, it’s an issue that needed addressing.
The New Rental Bidding Laws
The biggest change is that real estate agents are no longer allowed to solicit or encourage offers of rents over the advertised price for residential properties.
According to the Department of Fair Trading, advertisements for residential rental properties must also include a fixed price. They can no longer be advertised within a price range, or with text such as ‘offers from’ or ‘by negotiation.
All advertisements must include a fixed price. If a prospective tenant voluntarily offers a higher price, this is acceptable. If a real estate agent is asked by a prospective tenant whether or not they should offer a higher price in order to secure the premises, the agent must advise that they are not permitted to solicit or invite a person to offer more than the advertised rent and that they should make their own decision about their rental offer.
One thing our landlords can rely on, is that the staff at Walkom Real Estate are committed to staying abreast of any reforms that are implemented and we stand prepared to get the best possible outcomes for our clients. Don’t hesitate to contact our Property Management team if you have any questions.
Download the Rent Bidding Fact Sheet (Source Office of Fair Trading)