Australian state bans rent bidding to improve rental affordability

Rent bidding will be illegal in Australia's state of New South Wales (NSW) as the government's latest effort to improve affordability for those looking for rental accommodation amid high cost of living pressures.

The new regulations, announced on Monday, will apply to all newly listed properties from Dec. 17.

Rent bidding means prospective renters will offer an agent over and above the advertised price for a rental property, in an attempt to sway the landlord to select them as the preferred tenant. Such practice generally happens when there's a shortage of available rental properties.

"From this weekend, agents will be prohibited from inducing a prospective tenant to offer an amount higher than that advertised for the property," said NSW Minister for Fair Trading Victor Dominello.

"Further, real estate agents cannot advertise a property unless it specifies the rent payable for the property."

NSW Premier Dominic Perrottet said banning rent bidding would help prospective tenants secure housing in a tight rental property market in a fair way.

The new policy came as Australia's rental market continues to tighten with low vacancy rates.

The research news released by property analyst firm, Corelogic, in October, said national dwelling rents have surged almost 20 percent since August 2020, equivalent to a weekly rent rise of approximately 90 Australian dollars (about 61 U.S. dollars) per week.

According to data from Domain, one of the country's major digital property portals, the national vacancy rate in November was steady at its lowest point on record, 0.8 percent.

Dominello said the reforms to regulations struck the right balance between the interests of renters, landlords and real estate agents.

"It can be very distressing for prospective tenants who have submitted a rental application only to be told to increase their offer to improve their prospects of securing a property," he said.

NSW Fair Trading will work with real estate agents and landlords to ensure they are aware of and comply with the new regulations.