NSW real estate agents will be banned from conducting rental auction "feeding frenzies" that push up the price of rental properties.
Premier Dominic Perrottet says solicited rent bidding - where real estate agents suggest prospective tenants offer a higher price on a rental property to better their chances of securing the lease - will be banned.
"For too long, particularly in a tight market, we've seen these auctions occurring from real estate agents across the state," he told reporters on Monday
"From Saturday that will no longer be the case."
However, the regulations stop short of banning unsolicited offers from tenants - meaning people at inspections can still offer a higher price to secure the lease - so long as the agent does not entice it.
Prospective tenants who are encouraged by real estate agents to up their offers will be able to report agents to the Department of Fair Trading.
Offending agents will be subjected to fines of $5500 for an individual and $11,000 for a corporation.
Fair Trading Minister Victor Dominello said the reform would protect vulnerable renters.
"We appreciate there are vulnerable renters out there that are just doing their best just to get a roof over their head," he said.
"The last thing we want is a feeding frenzy of activity when the market is so hot."
It comes after NSW Labor announced it would seek to legislate an end to rental bidding.
The government said it would not have parliament return to make laws on the issue, preferring to have regulations in effect by the weekend.
The promise ahead of the March election comes amid skyrocketing Sydney rents as well as those in regional areas, with NSW's median rent increasing from $386 to $420 a week between 2016 and 2021.
With one in three NSW households now renting, Opposition Leader Chris Minns says Labor has prepared legislation which would ban secret bidding.
Labor is also proposing a portable bond scheme to help relieve some of the cost pressures of moving homes by allowing renters to transfer their bond from one property to another.
Responding to the Perrottet government's plan, Greens MP Jenny Leong welcomed the move but also called for an end to no-grounds evictions as well as a rent freeze.
"The Greens welcome this reform as a good first step but also recognise that a great deal more can and should be done to protect the millions of renters across NSW," Ms Leong said.
Labor says more of the state's residents are becoming lifetime renters and more than a third of existing renters are paying over 30 per cent of their household income towards their weekly rent.
Mr Minns is promising to establish a rental commissioner to be an advocate and voice for tenants, who would work closely with government, consumer affairs and stakeholders.
"We'll install a rental commissioner, whose job will be to hold landlords and agents to a high standard to ensure fairness across the rental market," he said.
