NSW Government to Limit Rent Increases to Once a Year in Response to Worsening Housing Crisis

The Minns Labor government in Australia’s most populous state, New South Wales, is planning to implement significant changes to rental laws. These reforms include capping rental increases to once per year, aiming to bring stability and fairness to the state’s 2.2 million renters.

The proposed regulation, introduced in Parliament on Oct. 15, will apply to both periodic and fixed-term leases, addressing loopholes in existing rental legislation to make renting in NSW more predictable.

Additionally, the reforms will abolish “no-grounds” evictions and provide clear guidelines on how leases can be terminated. They will also simplify the process for tenants to keep pets in rental properties, with landlords only able to refuse requests on specific grounds.

Renters will also benefit from free payment methods, such as bank transfers and Centrepay from the Commonwealth government, and will not be required to cover the costs of background checks when applying for a rental property.

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Minister for Fair Trading Anoulack Chanthivong emphasized that these reforms result from extensive consultations with renters, industry stakeholders, and tenancy experts, aiming to strike a balance between the interests of renters and landlords. The government has also set up a Rental Taskforce within NSW Fair Trading to address housing concerns more effectively.

The proposed cap on rental increases aligns NSW laws with the National Cabinet’s “Better Deal for Renters” initiative, creating a fairer and more straightforward renting process. The government hopes to enhance renters’ security by limiting rental increases to once per year.

Current protections against multiple rent hikes do not cover fixed-term leases of less than two years or transitions from periodic to fixed term leases. By limiting increases to once per year, the government intends to provide renters with increased security.

These legislative changes are a response to the housing crisis gripping the state.

15,000 Unable to Secure a Home Each Month: REINSW

According to data from the Rental Bonds Board, around 15,000 individuals struggle to secure rental properties each month in NSW. The Real Estate Institute of NSW (REINSW) describes the housing system as “broken,” underscoring the severity of the crisis.

REINSW CEO Tim McKibbin highlights the urgency of the situation, noting the widening gap between available rentals and the growing population in need of housing.

In 2023, NSW welcomed 186,433 new residents, resulting in a net monthly increase of 15,536 individuals searching for accommodation.

As of March 31, 2024, there were 970,428 rental properties in the state, showing minimal growth from September 2023 and failing to keep pace with rising migration, exacerbating the housing crisis and leaving many in difficult circumstances.

McKibbin warns of the severe implications for individuals and families across the state as the number of people unable to find rental properties continues to rise.

Meanwhile, the Greens Party in the state advocates for an immediate two-year rent freeze nationwide, followed by a cap on future rental increases at 2 percent every two years. They also propose the establishment of a new public property developer to boost the availability of public and affordable housing, alongside a National Renters Protection Authority to enforce their proposals.