The Real Estate Institute of NSW has hit out at the State Government’s implication that property managers and landlords are to blame for the state’s rental crisis, following news this week that the practice of ‘rent bidding’ was being investigated.
Fair Trading Minister Victor Dominello told The Daily Telegraph that he had asked for the practice to be examined with a view to outlawing it.
Rent bidding occurs when tenants, desperate for a place to live amid the severe shortage of rental accommodation, feel they have no choice but to offer to pay more than the asking rent.
“This is obviously an area where vulnerable people are exposed and needs reform,” Mr Dominello told The Daily Telegraph.
“I have asked my agency to investigate and come back with recommendations.”
But REINSW Chief Executive Officer Tim McKibbin said any suggestion agents would instigate an ‘auction’ for a rental was ludicrous.
He said the investigation was the NSW Government’s attempt to avoid taking ownership of its failings in the rental crisis and he called on the government to reveal how it will increase rental supply.
“The ongoing attacks on people who work in the industry and who own an investment property are a shameful attempt by the government to distract tenants from its own shortcomings, namely its failure to support the supply of homes for people to rent,” Mr McKibbin said.
“REINSW therefore issues the NSW Government a challenge: provide actual detail to NSW voters outlining how many rental properties it will commit to delivering in the state, by when, and by what delivery method.
“Government’s landlord-bashing strategy has not helped with supply. It has had the opposite effect. A new strategy is needed.
“It’s time for the government to be accountable. Only through incentivising investment in this sector of the economy can supply be addressed and begin to meet demand.
“Agents cannot conjure up more properties for people to rent.”
Mr McKibbin said the government was aware of the supply problem and over the past 12 months the NSW population had grown by more than 100,000 people while the number of rental properties had dropped 50,000.
“When 40 people apply for a rental property, irrespective of what rent is paid, 39 people still have nowhere to live,” he said.
“Instead of blaming the landlords and agents in this scenario who help someone find a home, the government must be accountable for all those who miss out.
“When a tenant offers an extra $20 a week in rent, it sounds good to a landlord whose repayments have gone up $1,000 a month.
“Isolating property managers and landlords as the cause of the market’s problems must be challenged.”
Best Nest Property Management Director Alison Hatch spoke to Elite Agent magazine about the rental crisis and said her agency policy and value was that they did not accept offers of higher rent, and property managers, landlords and tenants were aware of this.
“We drive the housing prices by doing that… and then that creates a false understanding in the marketplace and an unrealistic expectation for landlords on what they’re going to get,” she said.
Ms Hatch said the key was to know your market, know the property and to price it appropriately for the market.
She said accepting offers of higher rent would not mean a tenant was the best tenant for the home simply because they could pay more, and her goal was to always find the best tenant for the right property.
Ms Hatch also noted that accepting higher offers of rent could be classed as discriminatory against renters who could not afford to pay more than the advertised rent.
“We are taught not to discriminate,” she said.
“So if I’m only going to put the person who can afford the most in the property, does that not come down to indirect discrimination?”
- Elite Agent magazine summer 2023 edition contains a seven page special report on the rental crisis. Sign up to become a Pro member to receive your copy.
