Reforms that experts warned would have created “rental auctions” and driven rents up have been shelved by the New South Wales government as it seeks to push through legislation it hopes will ease the state’s housing crisis.
Labor’s plan to end “secret” rent bidding was panned by tenants’ advocates, homelessness groups and real estate agents when it was introduced to parliament in May, prompting a rethink and redraft of the legislation.
The premier, Chris Minns, said the change was being made so the rest of the rental reform bill could pass.
“We have been upfront: the minority parliament won’t support every bit of every bill and we’ll be pragmatic working through that,” he said.
“This decision means we can get on with the rest of our rental reform agenda, including ending ‘no-grounds’ evictions.”
Under the rules, agents are banned from asking applicants to offer rental rates higher than the listed price but they are permitted to accept unsolicited offers.
The government’s proposal would have forced agents to disclose offers above the listed price to other prospective tenants, which could give them a chance to make higher bids.
The better regulation minister, Anoulack Chanthivong, said getting other reforms through quickly was important given the housing crisis affecting the state’s two million renters.
“Being an Australian-first reform, we understand there are questions about how a ban on secret rent bidding will be implemented,” he said. “We can’t let that put a handbrake on areas where there is broad agreement.
“I want to thank the crossbench and renters’ advocates for their engagement on these reforms.”
The minister had previously defended the plan, arguing it would create “transparency and fairness”.
The altered bill will include changes to allow bonds to be transferred from one property to the next, known as a portable bond scheme, and close a loophole in the current rent bidding law so it applies to property owners, not just real estate agents.
The Greens and opposition pushed back on the rent bidding reforms after real estate agents last week told a parliamentary inquiry they would cause conflict between applicants and property managers while driving up rents.
The Real Estate Institute of NSW’s chief executive, Tim McKibbin, told the inquiry the plan would not deal with what he believed was the underlying problem causing the rental crisis – a lack of supply – and urged the government to let the market sort itself out.
“It’s an old saying that says the market never lies and the market does what the market will do,” he said. “If we interfere with that then there will be adverse outcomes.”
The committee also heard from renters’ advocates and peak bodies who reiterated their concerns that the changes would result in a worse outcome for tenants.
The proposal has not been scrapped entirely and will instead be reviewed by the incoming NSW rental commissioner, with interviews for the position to begin this week.
Parliament returns on 20 June.
