The Malinauskas Labor Government will move to ban rent bidding in South Australia in a bid to ease soaring rental prices.

Adelaide’s median rent is now $450 per week (houses and units combined) – a record high – and the vacancy rate is among the lowest in the nation at 0.6 per cent.

This has encouraged ‘rent bidding’ where tenants are encouraged to offer above the advertised price to secure the property.

The practice will become illegal as part of reforms to the Residential Tenancies Act 1995 to be introduced to Parliament.

Landlords will no longer be able to advertise properties with a rent range, put properties up for rent auction, or solicit offers over the advertised rental price.

Additionally, where a third party is facilitating tenancy applications, any rating or assessment of a prospective tenant must not be based on an offer of higher rent.

This significant reform brings South Australia in line with other Australian jurisdictions, which have introduced restrictions on rent bidding.

The government is committed to improving protections for tenants as well as ensuring landlords can continue to manage properties effectively with further work being done on additional changes in coming months.

The reform comes after we received considerable feedback from tenants as well as landlords and stakeholders as part of the review.

Quotes

Attributable to Andrea Michaels

I understand how tough the rental market is for South Australians with rental prices continuing to rise and Adelaide having one of the lowest rental vacancy rates in the nation.

The practice of rent bidding unfairly drives up prices and is contributing to the current rental crisis by making it more and more difficult for South Australians to find affordable rental accommodation.

That’s why we are cracking down on rent bidding because I want to make the system fairer for South Australians looking for a home.

Attributable to Cain Cooke, Real Estate Institute of South Australia (REISA) Chief Executive

REISA supports the banning of rental bidding whereby an agent can ask a tenant to pay more than the advertised price or hold a rental auction consistent with our code of conduct.

These provisions will ensure clarity and transparency for tenants and enable them to lodge an application with certainty as to their capacity to meet the rental affordability of the property.

Attributable to Alice Clark, Shelter SA Executive Director

In the current environment of increased rents and a lack of availability of rental housing it is no surprise that people who are in need of a home are taking desperate measures to put themselves ahead of the hundreds of applicants we are seeing apply for every property, potentially placing unrealistic financial pressures on the family budget.

It is encouraging to see Minister Michaels adjust the legislative levers that can improve an aspect of affordability and prohibit practices that take advantage of applicants who cannot secure a home.

Shelter SA welcomes the modernisation of rental laws and the proposed improvements to prohibit rent bidding, advertising rent ranges and legislating against the conduct of rental auctions.