In a proactive response to the ongoing housing crisis, the government of South Australia has taken a major leap forward by implementing a ban on rent bidding.
This measure is designed to tackle the issue of rapidly increasing rental prices that have been negatively impacting the region.
According to AAP, the state parliament passed new laws on Tuesday that prohibit landlords from engaging in certain practices, such as advertising properties with a rent range, conducting rent auctions, and soliciting offers that exceed the advertised rental price.
Adelaide’s rental market is currently experiencing significant challenges, with the median rent reaching a record high of $450 per week for houses and units combined, Glam Adelaide reported.
Adding to the problem is the remarkably low vacancy rate of only 0.6 per cent, further exacerbating the difficulty for residents to secure affordable housing.
As a result, a phenomenon known as “rent bidding” has surfaced, where landlords are motivated to submit rental offers that surpass the initially advertised price to secure a tenancy.
“We have banned rent bidding in South Australia. 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” stated Andrea Michaels, Minister for Consumers and Business Affairs.
Michaels added that ” Government understands how difficult the rental market is with South Australia having one of the lowest rental vacancy rates in the nation.”
Additionally, she noted that the government continues to make decisions with the aim of creating a “fairer and more accessible system for South Australians looking for a home.”
In accordance with the latest regulations, landlords and agents are now restricted from employing certain practices when advertising rental properties. These regulations prohibit the use of rental ranges in property advertisements, conducting rent auctions, and soliciting offers that surpass the advertised rental price.
South Australia has recently joined other Australian jurisdictions in implementing restrictions on rent bidding, thereby aligning itself with the efforts to address the housing crisis.
The government has taken steps to ease the financial burden on tenants by raising the bond threshold from $250 to $800.
This enables most tenants to pay a four-week bond instead of the previous requirement of six weeks, resulting in substantial savings.
In fact, within the first month of implementing this measure, approximately $1.3 million was saved collectively by tenants in South Australia
Further reforms are currently under consideration, as the government seeks to amend the Residential Tenancies Act to ensure that landlords cannot arbitrarily refuse a request for pet accommodation while allowing landlords to set reasonable terms.
The government also plans to extend the minimum notice period for lease termination from 28 days to 60 days. This will provide tenants with more time to search for new rental spaces and prepare for the transition with greater flexibility and security by making necessary arrangements.
Furthermore, there are expected to be reforms that will require landlords to provide specific reasons for the termination of a periodic lease or the rejection of a renewal of a fixed-term agreement, disclosing, for example, the landlord’s intention to move or sell the property.
This aims to safeguard the rights of tenants and provide them with greater transparency and stability in their rental agreements.
