A New South Wales government plan to make renting fairer and more transparent has been panned by real estate agents, who told a parliamentary inquiry that the reforms would cause conflict between applicants and property managers while driving up rents.
The industry professionals appeared before a parliamentary committee set up to examine the government’s plan to ban “secret” rent bidding, echoing concerns of rental advocates that the scheme would create rental auctions.
Agents are already banned from asking applicants to offer rental rates higher than the listed price, but they are permitted to accept unsolicited offers.
The government’s proposed reforms would force agents to disclose offers above the listed price to other prospective tenants, which could give them a chance to make higher bids.
The Real Estate Institute of NSW’s chief executive, Tim McKibbin, told the inquiry the plan would not deal with what he believed as 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. If we interfere with that then there will be adverse outcomes,” he said.
“What we’ve been dealing with is symptoms of the problem and it always troubles me when we interfere with a free market.”
McKibbin added: “If we deal with rent bidding, or we don’t, it really doesn’t matter. This is one of the points I made earlier about dealing with symptoms of the problem.”
Michelle McLean, a board member of the institute, said the change would “cause conflict between applicants and property managers” in what she described as an already sensitive process.
“It’s not the right thing to do,” she said.
Raine & Horne’s head of property management, Maria Milillo, also panned the scheme and advocated for the status quo, but conceded it was not perfect.
“While I’m a believer in transparency, I just feel as though it’s going to drive prices higher and cause headaches for property managers,” she said.
The committee also heard from renters’ advocates and peak bodies who reiterated their concerns that the changes would result in a worse outcome for the state’s 2 million renters.
The Tenants Union of NSW’s chief executive, Leo Patterson Ross, said it would put more pressure on renters to offer more than the asking price.
“We don’t auction off other essential services,” he said.
Ross said implementing a fixed, advertised price for all rentals would be the most transparent solution in preventing rent bidding altogether.
The average Sydney rent has risen more than 13% in the past year, to $711 a week. Units have surged by a record 19.1%, forcing the average apartment tenant to find an extra $106 a week.
The state Liberal MP Tim James said the evidence presented on Friday was an indication the government was getting it “horribly wrong”.
“It’s time for the government to admit their policy is flawed, and finally listen to the community and experts,” he said.
The Greens’ housing spokesperson, Jenny Leong, echoed the concerns about the bill.
“We’ve heard clearly today that no one is asking for rental auctions to be entrenched in NSW – not the real estate industry, tenants advocates or peak bodies,” she said.
“We need to end the harms caused by rent bidding, not add further pressure to an already stressed system, and give renters the ultimate transparency of fixed, advertised rental prices.”
With AAP
