Millions of tenants in NSW will receive some much-needed relief from an increasingly claustrophobic rental market as industry reforms gradually coming into effect over the next six months.
NSW Premier Chris Minns said the state’s 2.2million renters will benefit as no grounds evictions are banned, rent increases are limited to once per year, pet owners are given more rights and fees for background checks are abolished.
‘Renters have been the forgotten people in NSW for too long. Housing is the biggest cost people have, and renters are now getting a fairer deal,’ Mr Minns said.
He said the reforms would ‘bring the rental market into the 21st century’ and had ‘got the balance right’ for both renters and owners.
It comes after Victoria introduced similar measures in October including penalising landlords for withholding bond payments without evidence.
NSW rental commissioner Trina Jones said the market was the toughest that renters have seen for decades as historically low vacancy rates combined with median rents for houses increasing by around 7 per cent over the last 12 months.
‘These reforms will provide tenants with practical and meaningful support, which will help ease the insecurity and vulnerability of renting in challenging city and regional rental markets,’ she said.
NSW Housing Minister Rose Jackson echoed Ms Jones’ sentiments, describing the raft of new reforms as a ‘huge win’ for renters.
NSW Premier Chris Minns (pictured on Tuesday) passed amendments to NSW rental laws which are currently being rolled out over the next six months
Renters lined up around the block at a Bondi rental property in early 2024. The rental crisis has since worsened according to industry figures
No grounds evictions
Among the changes to rental laws in NSW are the banning of no grounds evictions, which improve housing security for renters and give landlords more clarity on when they can end a fixed term or periodic lease based on clear, straightforward reasons.
According to the Tenants Union of NSW, no grounds evictions in NSW refer to the practice of landlords evicting tenants without being required to provide a reason.
Some valid reason are a breach of tenancy agreements, proposed sale of the property, significant renovations or demolition, landlord or their family moving in, and situations where the property will no longer be used as a rental.
The union said this provides a loophole that could be exploited by landlords.
‘Landlords may claim they intend to sell, only to later abandon the sale without significant consequence. Allowing eviction for repairs risks landlords neglecting their maintenance obligations only to later use renovations as an excuse to evict tenants.’
Tenants Union of NSW CEO Leo Patterson Ross said, ‘Millions of renters have felt the impact of no grounds evictions in their lives – whether it was hesitating to ask for repairs or negotiate a rent increase, or having to find a new home without justification.
‘This is the single most significant change we can make to residential tenancies law, as without protection from unfair eviction in place we can’t rely on other parts of the law to function properly.’
NSW housing minister Rose Jackson (pictured) said the changes were a ‘huge win’ for renters
Renters will no longer be charged for background checks in NSW and can no longer be evicted for no reason (pictured, renters inspect a flat in Bondi in Sydney’s east)
Perks for pet owners
All tenants can now request to keep pets at their rental. Landlords will be unable to refuse except for a list of reason specified under the new law.
Previously landlords had the choice to specify no pets at their property, unless it was an assistance animal, and did not have to provide a reason.
‘It stands to reason that there are thousands if not close to a million people who are renters who have a pet in NSW. We need to make it as easy as possible. The days of automatically rejecting a pet for no reason are over,’ Mr Minns said.
According to the Residential Tenancies Amendment Bill 2024, ‘A landlord must not unreasonably refuse consent for a tenant to keep an animal on the residential premises.
‘It also provides that a landlord is taken to have consented to the keeping of the animal on the residential premises unless, within 14 days after receiving the request, the landlord applies to the Tribunal to refuse consent to keep an animal on the residential premises.’
Under the law a landlord can only refuse to give consent for keeping a pet if it would result in an unreasonable number of animals at the premises, the fencing is not appropriate, there is insufficient open space, or the animal could not be kept at the premises humanely.
Additional reasons are if the animal is likely to cause damage that would cost more to repair than the bond, the landlord resides at the premises, keeping the pet would contravene any laws or by-laws, or if the tenant refuses to agree to a reasonable condition on keeping the pet.
Among the changes to rental laws in NSW are the banning of no grounds evictions, which improve housing security for renters (pictured, a home for lease in Canberra)
Landlords in New South Wales will no longer be able to reject tenants with pets unless they have a reason set out in law (stock image)
Limit on rent increases and fees
Rent can now only be increased once per year.
However, the amount of the increase was not capped under the new legislation.
Additionally, a range of accessible payments options must be provided including Bpay, Centrepay and bank transfer.
Background check fees have also been banned under the new legislation, which removes a barrier for struggling renters apply to multiple properties in the competitive market.
Housing minister Clare O’Neill said she supported the states to ban no-grounds evictions, rent-bidding and to limit increases, she said.
The Greens have called for rent caps but Ms O’Neil said these were also a state responsibility and could reduce supply, worsening affordability.
The government is instead attempting to get more homes built and allow fewer international students into the country.
A recent survey from Flatmates.com.au showed about a third of renters were hit with rent hikes in the past six months – with half of those larger than tenants anticipated.
More than half of the 8,700 respondents now believe the dream of home ownership is out of reach for young people.
Huge queues of Sydneysiders are seen lining up to inspect an apartment in the city’s east
And nearly 60 per cent of renters polled said they struggled to meet their payments, up from 14 per cent in 2023.
‘Ongoing cost of living pressures over the past 12 months have reshaped how Australians approach housing, with 43 per cent of respondents saying affordability constraints have pushed them into share accommodation,’ product manager Claudia Conley said.
The survey found the proportion of members aged over 55 entered share housing arrangements had risen seven per cent year-on-year, with over-75s the fastest-growing demographic.
‘Half of respondents over 55 did so through financial necessity, however there was also a 30 per cent rise in respondents opting for shared living for the companionship that it offers,’ Ms Conley said.
Meanwhile the Real Estate Institute of Australia’s 2024 September quarter report revealed housing affordability has reached a historic low.
The proportion of income required to meet median rents increased by 0.3 percentage points over the quarter, meaning tenants now spend about one quarter of their pay on rent on average.
Rental affordability declined in every state and territory except Victoria and Queensland. It decreased Australia-wide by 3.0 percentage points over the past five years and 3.6 percentage points over the past 20 years.
NSW remains the most unforgiving state or territory to live as a renter or mortgage holder.
Families with an average loan repayment are now spending 58.1 per cent of their income on each instalment, while tenants spend 28.7 per cent of their pay.
Australians are generally considered to be in rental stress when they pay more than 30 per cent of their income in rent.
