- Rental bidding is when prospective tenants offer more than asking rent, effectively an auction bid
- REINSW CEO said it shows a lack of understanding about the issues by the NSW government
- Comes as property managers are and landlords are exiting the market
The peak real estate industry body in New South Wales has criticised the state government’s plan to review rental bidding, saying it is an attempt to paint the real estate industry as the cause of the rental crisis in Sydney and regional NSW.
Rental bidding is when tenants, in an act of desperation, feel they have no choice but to offer more than the asking rent to secure a property.
The Daily Telegraph was briefed by the state government for its plan for the review.
Tim McKibbin, CEO of the Real Estate Institute of New South Wales (REINSW), said the suggestion that effectively an auction would be instigated by agents is ludicrous.
“The ongoing attacks on people who work in the industry and who own an investment property are a shameful attempt by 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.
Tim McKibbin, REINSW CEO
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“Government’s landlord-bashing strategy has not helped with supply. It has had the opposite effect. A new strategy is needed.
Housing supply the key issue
The news comes as the rental vacancy rate has significantly declined over the past year, with a vacancy rate of just 1.3%, according to SQM Research.
Greater Sydney
[Select part of the chart to zoom in on various years, and ‘reset zoom’ button to return]
Asking rents have also been on the rise, with a steep increase since mid-2020, with asking house rental prices just under $900 a week. .
Greater Sydney
[Select part of the chart to zoom in on various years, and ‘reset zoom’ button to return]
Mr Mckibbin said that it demonstrates the state government’s lack of understanding of the biggest industry in the state, in particular not appreciating the need for incentivising investment in housing supply.
“It’s time for 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,” he said.
Mr McKibbin said it is “appaling” for the state government to continue its dishonest campaign that blames property managers and landlords.
“When 40 people apply for a rental property, irrespective of what rent is paid, 39 people still have nowhere to live. Instead of blaming the landlords and agents in this scenario who help someone find a home, Government must be accountable for all those who miss out,” he said.
“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. The numbers are clear – property managers are leaving the industry and landlords are exiting the market.
“Numbers don’t lie. Over the last 12 months, the NSW population has grown by over 100,000 people while the number of rental properties has declined by 50,000.”
In conclusion, he said the state government needs to stop “spreading politically popular lies” and show respect towards tenants.
“Sadly, the crisis will only get worse while Government spends its energies blaming other people for its failings,” he said.
