Loophole law allows tenants to outbid other renters in NSW

Since December 2022, the NSW government introduced legislative changes that outlawed "rent bidding", which made it illegal for agents such as property managers and landlords to solicit a higher offer than the rental amount advertised.

Mr McKibbin said if a prospective tenant offers up a higher amount than the listed price, the real estate agent "must" inform the landlord who can then accept the higher amount if they choose.

"The reason tenants do it is because they turn up to an open, and they look down the street, and there's 50 people trying to acquire the property," Mr McKibbin told the Leader.

"So to distinguish themselves from the competition, they offer more money. It's not the landlord or the agent encouraging rent, it's a symptom of the market."

There is no law against landlords refusing to accept a higher offer than advertised for their rental, only that they must not 'solicit' or 'invite an offer' more than what is advertised, according to NSW legislation.

The average cost of a rental unit in Tamworth has jumped 21.7 per cent, and houses are up 31.3pc, in the five years to June 2023, according to the latest statistics from the Domain Rental Report.

"Despite a recent improvement in the vacancy rate, a significant supply boost is needed to alleviate tight rental conditions, suggesting the outlook remains challenging for tenants," the report stated.

READ ALSO:

Mr McKibbin was among a group from REINSW who were in Tamworth on Tuesday, October 24, speaking to local real estate agents as part of their four mandatory hours of Continuous Professional Development (CPD) training per year.

The REINSW Roadshow is part of an annual state-wide tour, where representatives update real estate agents about how to navigate changes in the property market, such as upgraded or introduced regulations and new technology.

Mr McKibbin said they talked about legislative changes, technology that streamlines services, and that he would later listen to feedback from local real estate agents.

"Here in Tamworth [we want] to find out what specific challenges they're facing," Mr McKibbin said.

He said across the state, the two "main issues" that need to be addressed by councils and governments, to encourage the construction of new housing in the private rental market, are shorter Development Approval (DA) times and a reduction in taxes.

"It can regularly take a consent authority [a council] two years or longer to get a DA through the system," Mr McKibbin said.

"And when you're buying a brand new property, 40 per cent of the cost is taxes and charges.

"So if you're buying a million dollar property, $400,000 of that the consumer pays in taxes and charges levied by all three levels of government."

The REINSW CEO said high migration and the return of international students is also putting pressure on the private rental market.

He said there was a distinction between 'public housing' and 'affordable housing' that are the responsibility of the government, and private rentals where the owner expects to make a profit from their "investment".

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: