September 2024
Reading Time: 3 Minutes
Rental bidding is about to be outlawed in Australia and the UK, following in New Zealand's footsteps. We look at why the practice has been banned, and how home occupiers have benefitted.
From 11 February 2021, landlords have not been permitted to invite or encourage rental bidding when renting out a property in New Zealand. The law change was part of the Residential Tenancies Amendment Act 2020.
Rental bidding refers to the practice where prospective home occupiers are invited to submit offers higher than the advertised rental price for a property. This often involves a competitive process where interested parties bid against each other, similar to an auction, to secure the rental property.
In New Zealand, rental properties cannot be advertised without a rental price listed, and the rental price must be stated in advertisements or offers for the property. This does not apply to service tenancies.
Landlords cannot invite or encourage prospective tenants to pay more rent for a property than is stated in the advertisement or offer. This means they cannot organise an auction over a rental property or offer to give the rental to a home occupier if they agree to pay more for it.
Yes, despite the law change prospective tenants can still voluntarily offer to pay more than the stated amount of rent and a landlord may accept this offer.
Rental bidding was banned in New Zealand to prevent artificial rent inflation, ensure transparency and promote fairness.
The law change has meant that home occupiers aren't wasting their time viewing properties that are advertised in their price range only to find out they can't afford them. In a tight housing market, this process can be very upsetting and time-consuming, with many hours being lost off work.
Every Australian state has now either banned or pledged to ban rental bidding, yet families continue to struggle with high rental costs. Advocates argue that the minimal number of prosecutions for rental bidding cast doubt on the enforcement and effectiveness of these laws. Meanwhile, housing campaigners in England are applauding proposed new laws to outlaw the practice, but caution that additional measures will be necessary to address the issue of unaffordable rents.
From Crockers' perspective, rental bidding was never necessary if a property manager conducted thorough market research and accurately assessed current rental values. Our property managers are well-equipped to gauge what the market is willing to pay, thanks to their in-depth knowledge and local expertise. One of the key advantages of Crockers' approach is our extensive team, who not only reside in the communities they manage but also work from a single office. This setup enables our managers to continuously share insights and experiences, providing a comprehensive and up-to-date understanding of market conditions.
Read more about setting the rent, considering pets and finding the right tenants, and the recent announcement of a pet bond for tenants.
What makes our property managers different is the knowledge gained from years of experience, practical ability backed up by a seasoned team and a true commitment to looking after your place.
Call 0800 CROCKERS or Call 0800 2762 5377
