Industry head slams NSW rental bidding ban, says undersupply is the root of the rental crisis
A leading real estate expert has delivered a scathing review of the state government’s move to ban the practice of rental bidding in NSW amid a worsening rental crisis.
In an email to members, Real Estate Institute of NSW CEO Tim McKibbin described the ban as “the latest, most hollow attempt” in the state government’s “dishonest campaign to position itself as the saviour of tenants.”
Sydney is in the midst of a rental crisis.
“Everyone – tenants, landlords, agents and Government itself – knows that it is tenants
who feel forced to offer above the advertised rent in order to secure a property,” he wrote.
“For tenants, it’s an act of desperation fuelled by lack of choice.”
On Monday, the government moved to outlaw the practice of rental bidding in NSW, whereby offers of higher than advertised rent are shopped around to other applicants to see if they will offer a higher amount in turn.
Renters are offering higher rent in order to cut through the competition. Picture: Richard Walker.
Under the proposed changes, real estate agents will no longer be allowed to invite higher offers from rental applicants despite tenants being allowed to make offers of higher rent.
Mr McKibbin said the change would do nothing to help tenants find a rental in a market of dwindling supply.
reveals its motivation as purely political,” he said.
“This headline-grabbing move will not help a single tenant find a rental.”
Worsening housing affordability has meant some renters have turned to share houses. Picture: Tim Hunter.
He said other policy measures had increased the cost to landlords, resulting in less investors and less available housing for renters.
“Government is not saving tenants,” he said.
“It is condemning them to a rental market that is becoming increasingly more difficult every day.”
It comes as a rental crisis intensifies across the state.
PropTrack data shows rents in some popular Sydney suburbs went up more than $300 a week in the space of one year as supply tightened and desperate tenants offered higher rent to improve their chances at securing a home.
PropTrack economist Paul Ryan.
PropTrack economist Paul Ryan said the difference between rent charged in existing and new tenancies was $60 a week on average as agents looked to the market to guide asking rents for newly listed properties.
“Normally across capital city markets, the difference would be about $15 a week,” he said.
“Now that differential is $60. It’s the largest we have ever seen.”
He said rents were expected to continue rising next year.
Renters have seen as much as $300 added to their weekly living costs over the year. Picture: Josie Hayden.
Director of Ayre Real Estate Craig Donohue said he had rented out properties for 10 per cent higher than the asking rent without ever inviting applicants to make higher offers.
“We’re in a situation where because the market is moving so quickly you might have multiple people offering higher amounts than what is being advertised,” he said.
“In a situation like that, if the owner decides to go with the party that has offered the higher number, that figure is not being shopped around to other parties that come through.”
By Kate McIntyre
Originally published by news.com.au
