This is so important, and it can’t wait. Here are the facts that the government is missing:

1. The NSW Government sought feedback on proposed changes to the rental laws in NSW which will contribute to the housing crisis, not solve it. The housing crisis is a supply and demand issue caused by a range of factors. These include investors leaving the market due to tenancy law restrictions, high property costs and rising interest rates. Lending to investors is down, so there are fewer people providing rental properties. Meanwhile migration into and across Australia is increasing, and major natural disasters have forced many people from their homes. Government policy has also incentivised public sector housing tenants to enter the private market. Supply of rental homes is going down yet demand for rental homes is going up.

2. The Government’s proposed reforms to the NSW rental laws, if implemented, will further restrict how landlords can use their asset. For example, proposals include restricting a landlord’s right to prohibit pets in their rental property, restricting the way in which landlords can terminate leases and introducing portable bonds (which would mean that a bond could be transferred from the previous tenancy to the new tenancy - essentially leaving two landlords with competing financial interests over the one bond). These measures will not fix the housing crisis problem and will erode landlord’s rights, causing them to invest elsewhere, reducing supply in an already competitive market and making tenants compete for a smaller pool of rental properties.

3. Other States have introduced measures like those described above and still have rental shortages. For example, the Victorian Government has abolished the right of a landlord to terminate a lease on no grounds and requires landlords to obtain a Tribunal order before they can refuse a request for a tenant to keep a pet, irrespective of how unsuitable the property might be. Concurrently, Melbourne experienced the biggest decrease “in total rental supply over the past year” (a 36.5% decrease), saw a year-on-year decline of 16.8% in new rental listings, and its December 2022 vacancy rate was a “historic low”*.

4. Changing residential tenancy laws is not an effective solution to the housing crisis. Rather than focusing on these proposals, Government should focus on addressing housing supply issues as well as supply issues in the development and construction industries and incentivising investment, especially institutional investors who have funds to purchase and build apartment blocks specifically for rental accommodation.

* Cameron Kusher, “PropTrack Rental Report – December 2022 quarter”, realestate.com.au (published & accessed on 19 January 2023).

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