Victoria to ban rent bidding outlawed in major crackdown on price hikes

News.com.au

13 hours ago

Victoria's rental market has become a pressure cooker, and desperate tenants are offering hundreds above asking price just to secure a roof over their heads.
Would-be renters are forking out far more than advertised prices and offering months of rent in advance in a bid to beat fierce competition across Melbourne, with inspections drawing dozens of applicants and many being repeatedly knocked back.
One man, attending his sixteenth inspection in two weeks, told the Herald Sun rent bidding — where tenants offer more than the listed rent — was 'the easiest way' to lock in a lease, especially in the inner suburbs.
'It's been really hard,' he said.
'It's really competitive, especially in these suburbs where people really want flats.'
Another renter said he would rent bid if he could afford to, while a third, searching in the northern suburbs with two friends, said someone he knew secured a home by offering six months' rent upfront.
'I think that's fair enough with how competitive it is,' he said.
A report by the Victorian Council of Social Services (VCOSS) last year found rental bidding remained an issue despite laws banning landlords and agents from soliciting it, with intense competition often pushing tenants to voluntarily offer more.
Tenants Victoria advocacy director Damien Patterson said the practice often flew under the radar.
'It's a really tight rental market; it's likely that a lot of renters are proactively offering higher bids and that'll help them secure a home,' Mr Patterson said.
'Oftentimes it takes place as a discussion between just two people – the person who's making a bid and the agent – so it can really be hard for people to know whether they have lost out.'
Mr Patterson said he was 'really pleased' about the new rules.
'We know that everybody needs a home and that renters are looking inside their budget, so it will be fairer when people are only expected to pay the advertised price,' he said.
One 27-year-old renter from Melbourne's inner west said he'd been applying for months with no success.
'Every inspection feels like a cattle yard – 10 people lining up for the same house,' he said.
'Agents are asking for everything short of a DNA sample.
'Proof of income, references, extra pet bonds, and even then, agents aren't responding. It's brutal.'
The VCOSS report described 'intense competition' in the market, with many renters applying for more than 60 homes before being forced to move into poorer quality or less suitable properties.
From November, all forms of rent bidding will be banned under new state legislation that prohibits agents and landlords from accepting or encouraging offers above a property's fixed listed rent.
Price ranges and 'offers over' listings will also be outlawed, with penalties of up to $47,422.
While agents have long been banned from encouraging bidding, prominent Melbourne buyers' advocate and investor Cate Bakos said desperate tenants often made unsolicited offers in hopes of standing out.
'If someone's been to ten or fifteen inspections, missed out every time, and they're feeling desperate, they start gauging their competition,' Ms Bakos said.
'Most rental inspections are public, and when you're standing in a queue of 20 people, it's pretty clear you're not the only one applying.'
Ms Bakos said hoped the new laws would close loopholes.
'The difference with the new ban is that it clamps down on situations where tenants offer six months' rent upfront, or try to 'incentivise' landlords with higher-than-asked payments,' she said.
A Richmond agent told the Herald Sun rent bidding was 'not encouraged' but still occurred, especially among renters in shadehouses or student groups, whom some landlords were reluctant to lease to.
Consumer Affairs Victoria received 53 contacts about rent bidding in the 2023-24 financial year, but only seven between July and December 2024.
While this may reflect a drop in agent-driven bidding, advocates believe voluntary bidding remains underreported.
Renters and Housing Union general secretary Harry Millward said conditions had only worsened since that report was published.
'Renters are choosing between heating and eating as they struggle to make ends meet,' Mr Millward said.
'Nobody should be spending more than 30 per cent of their income if they've got another option, but the thing is a lot of people don't have another option.'
Investors leaving the market have further shrunk rental supply.
Between July and December 2024, Consumer Affairs Victoria received more than 35,000 enquiries about rental issues — including maintenance, lease terminations and tribunal disputes.
A CAV spokesperson said the agency was closely monitoring compliance.
'Rental bidding and demanding an unlawful bond amount are breaches of Victoria's renting laws and our renting task-force takes this conduct very seriously,' they said.
'We encourage anyone who has concerns about potential rental bidding or other breaches to report it to us.'
Housing All Australians director Robert Pradolin said unaffordable housing had far-reaching consequences.
'With a roof over someone's head, they are more likely to be productive citizens of society and pay taxes and avoid the unintended human consequences that manifest in physical and mental health problems, family violence … and long-term welfare dependency,' Mr Pradolin said.
His comments follow growing calls to treat housing as essential infrastructure — on par with roads and health — to ensure Australia's long-term economic and social stability.
'We need to put this in the classification of fundamental infrastructure for a future prosperous country.'