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Motion: Rent Freeze and Rent Bidding Ban

20 March 2024

The Hon. R.A. SIMMS (16:50): I move:

That this council—

  1. Congratulates the Malinauskas government on reforming the Residential Tenancies Act in 2023 to strike a better balance between renters and landlords but recognises that more action is needed to curb soaring rent prices.
  2. Notes that:

(a) Australia is experiencing the worst rental crisis in 17 years with the latest PropTrack data revealing rent prices in South Australia have increased between 10 to 30 per cent across 92 suburbs over the last year; and

(b) Shelter SA’s 2022-2024 survey of landlords, tenants and real estate agents revealed that ‘rent bidding’ allowing landlords to accept offers above the asking price is still prevalent in South Australia

3. Calls on the Malinauskas government to:

(a) freeze residential rents for two years and cap any future increases in line with inflation; and

(b) ban rent bidding in its entirety by prohibiting landlords and real estate agents from accepting offers above the asking price for a residential tenancy.

This motion congratulates the Malinauskas government on the well overdue reforms that were made to the Residential Tenancies Act in this parliament last year. I want to put on record again my appreciation to the Malinauskas government—Minister Michaels and also the Premier, with whom I worked closely on those reforms—because the government did action many of the issues that were outstanding in the rental market. They addressed many of the issues that were concerning advocates in this space.

But the one area where they did not take action, where they were found wanting, was on the issue of rent prices, so this motion calls on the Malinauskas government to implement an immediate rent freeze for two years with any future increases to be kept in line with inflation, and also calls on the government to actually rule out rent bidding.

Members might recall that in their first tranche of rental reforms the Malinauskas government introduced an amendment to end the so-called practice of rent bidding. What they did was prevent agents and landlords from being able to advertise properties in a range. Their view was that that was contributing to the spiralling cost of rental properties. I agree with that, but what the government did not do was actually extend the principle to also say, if you are an agent or a landlord, you will not be able to accept an offer above the asking price.

I asked questions of the government about this in the committee stage of the bill, and I thought it might be useful to revisit some of the things that were said from Hansard because the Greens are often ahead of these debates. We did warn at the time that what the government was doing was not going to actually address the crisis that we faced in terms of unscrupulous conduct, in terms of people driving up prices by making offers below the counter.

Unfortunately, according to the latest data that Shelter SA have released, 28 per cent of respondents are still participating in rent bidding and 8 per cent of respondents are paying additional bonds contributing to the rise in median rents. That is their report that has been conducted over the last two years. That is concerning because the Malinauskas government assured us all that they were putting an end to this practice last year.

I will just revisit some of the exchange from Hansard. I said to the Hon. Kyam Maher, who was representing the Minister for Consumer and Business Affairs in the committee stage of this bill:

Many speakers on behalf of the government have talked about the bill banning rent bidding. Could the minister explain to me how precisely the bill bans rent bidding when landlords and real estate agents are still able to accept an offer that is made above the asking price?

The minister replied:

On my advice, what this bill proposes is that it will not allow landlords to solicit offers of higher rates than what is advertised. It will not stop acceptance of higher rates, but it will prohibit the soliciting of rates higher than what is advertised.

Then I went on to say:

Yes, I accept that, but how precisely does this ban rent bidding? Is rent bidding only the practice, in the government's mind, of advertising for rents higher than the asking price? Surely the bidding is when the individual is able to actually put in a bid that is higher than the asking price. Can I ask why that is not addressed?

The Hon. Kyam Maher said:

I thank the honourable member for his question. I do not have a lot more to add, but what this bill does do is prohibit the soliciting or asking for higher prices. It does not prohibit the acceptance of it, but it prohibits asking for that and therefore promoting people to do that.

I went on to ask the minister:

Webster's Dictionary defines a bid as 'to offer a price for payment or acceptance' or as a verb 'to make a bid; to say what one will pay'. In light of that definition, how precisely does the government's bill ban rent bidding if actually all it is doing is banning the advertising of a rent price above the asking price?

The Hon. Kyam Maher replied:

I am advised that in effect what this legislation does is ban the practice by agents: that is, it stops agents going out to solicit or attempt to have potential tenants offer higher amounts.

I went on to press the minister:

The Webster's Dictionary definition of the word bid is 'to offer a price for payment'. Does the minister therefore concede that the bill does not actually ban the bid?

The minister responded by saying that this was some semantics. But, as I have said, the advice is that it stops landlords engaging in this sort of behaviour. I will not go on, Mr President, because I think you get the point. The point is that what the government did, did not actually stop rent bidding and, as a result, the practice is still prevalent in South Australia. So the government needs to close that loophole and that is what this motion is calling on them to do.

I want to talk a little bit about the need for a rent freeze. It is clear that Australia is in the midst of the worst rental crisis in nearly 20 years. The data tells us that story. Data from PropTrack has revealed that rent prices in South Australia have increased by 10 to 30 per cent across 92 suburbs over the last 12 months. Median rent prices in Adelaide in the past 12 months have risen 13 per cent, far exceeding the 4.8 per cent rise in CPI, and the 4 per cent rise in the wage price index in the 12 months up until December 2023.

Of the nearly 20,000 renters in South Australia, roughly a third are experiencing rental stress. Rental stress is defined as housing costs exceeding 30 per cent of a household's gross income, with 38 to 60 per cent representing severe unaffordability, and 60 per cent or more indicating extreme unaffordability. For low income renters in South Australia the problem is even worse. Two-thirds of those households spend 30 per cent or more of their income on rent, according to PEXA and LongView. I should clarify that I think those figures relate nationally but it would be the same here in our state. Nearly 28 per cent of people aged 45 to 54 rent today, compared with fewer than 20 per cent back in 2001. Among those aged 55 to 64, 21.6 per cent are renters, compared with 15.7 per cent more than two decades ago.

The changes that the government made to the Residential Tenancies Act, working in partnership with the Greens here in this place last year, were a good start, and we welcome that. I note the disappointing opposition of the One Nation party and others to those reforms that are really helping vulnerable South Australians. But the changes have not gone far enough. More action is needed to curb soaring rent prices. Renters desperately need a break. We cannot have another two years like the two years that we have had.

Sometimes when I talk about rent freezes and the like, people think that I am being incredibly radical—and I see the Hon. Heidi Girolamo is smiling there—but I want to refer to the Liberal Party's own policy in the state of Tasmania, where they are in the middle of an election campaign. Part of their housing plan is to provide a $200 a week cash incentive and guaranteed rental income for two years to 500 property owners who cap their rents between 25 and 30 per cent of the median rate.

If it is good enough for the Liberal Party in Tasmania, surely it should be good enough for the Malinauskas government in South Australia. That bastion of left-wing politics over in Tasmania that is the Tasmanian Liberal Party is telling the Malinauskas government or setting the signpost for the Malinauskas government in South Australia.

This is not a radical idea. We have had rent freezes in the past. Indeed, the Greens worked with the previous Marshall government and in particular Minister Vickie Chapman, to secure the passage of a rent freeze during the COVID period through this chamber, and it is time for us to do so again, to give renters some relief and then to cap rent increases in line with inflation going forward.

We could also look at the Liberal Party proposal from Tasmania, that radical left-wing clique that makes up the Tasmanian Liberal Party, and my old mate from federal politics, Eric Abetz, who is always at the vanguard of these left-wing debates, I am sure would agree. It is an important issue and we need to see leadership from this parliament so that we can provide support to South Australians who are struggling to put a roof over their head because that is a fundamental right of each and every person to have a place to live, a roof over their head and a place to call home. With that, I conclude my remarks.