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The Real Estate Institute of New South Wales is pushing hard against the state’s current agenda for tackling the rental crisis.
The state institute’s CEO, Tim McKibbin, struck out against both a recently passed bill – the Rental Fairness Bill which became law on July 3 – and a raft of proposals that are up for discussion in a consultation paper the state released last week.
The measures that recently passed parliament included closing existing loopholes to crack down on rental bid solicitation, allowing the incoming rental commissioner to gather pricing data from agents and put in place the legal framework to establish a portable bond scheme.
Mr McKibbin called the measures into question, maintaining the changes contained in the bill would now exacerbate the extreme lack of supply in the rental market, with vacancies in the capital hovering barely above 1 per cent.
“The so-called Rental Fairness Bill will only make matters worse – leading to longer queues down the street for a shrinking number of rental properties,” he said.
Mr McKibbin also took aim at the name of the bill.
“Naming the Act ‘Fairness’ doesn’t of itself make it fair. We should ask, if it’s fair, why does it need to be described as such?”
At the time of the bill’s passage Premier Chris Minns signalled that more rental reforms were to come, and Minister for Better Regulation and Fair Trading, Anoulack Chanthivong, followed up promptly by releasing a consultation paper called Improving NSW Rental Laws, that lifted the lid on a number of measures the government plans to move forward with, pending stakeholder consultation.
The proposals seek feedback on the government’s intention to end no-grounds evictions, make it easier for renters to keep pets, introduce new data protection requirements when handling renter information, and implement the portable rental bond scheme. It also aims to close a loophole that allows landlords to raise rents more than one time in a year if a lessee switches from one type of rental contract to another.
Mr McKibbin said that the NSW government had been acting with its recent and proposed changes to “target landlords” and put focus on the flow-on effect of landlords leaving the market, which depletes available rental stock and further tightens vacancy rates.
He suggested that an exodus was already underway by looking at data on rental bond figures.
“Almost without exception, one bond held by the Rental Bonds Board equals one rental property. In NSW, total residential bonds held as at 30 June 2023 was 961,471. As at 30 April 2023, it was 961,946,” REINSW cited.
“At a time of record immigration, net internal migration and general population increase in NSW, the number of homes rented in the state has actually dropped,” Mr McKibbin said.
In his view, the government’s policy should focus on encouraging investor activity in the market to ease vacancy rates.
“Anything government does in the residential rental market must be focused on retaining existing investors and driving investment into the market. Instead, the government requires residential property investors to pay upwards of $50,000 in stamp duty for the privilege of buying a rental property, then proceeds to tell them what they can and can’t do with their property.
“Now we have a series of proposed reforms which, instead of protecting tenants, actually condemn them to a worse fate,” Mr McKibbin said.
He suggested that in the process of consultation over the new proposals, the minister for better regulation should meet the people at the site of the issue.
“Minister Chanthivong should ask the 50 people queued down the street to inspect a rental property what they believe the problem to be. With the benefit of that information, hopefully we would then see some legislative action to tackle the real issues,” Mr McKibbin said.
“In the meantime, we should brace ourselves for increased social and economic problems. Sadly, things are about to get a lot worse,” he added.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
