South Australia introduces sweeping reforms to protect renters from exploitation

As pressure mounts on renters across Australia, one state has moved to give tenants a new lease on life with sweeping reforms on everything from rent price increase limits and notice periods to tougher penalties for exploitative landlords.

South Australia’s second tranche of rent changes came into effect this month, part of a three-pronged set of reforms designed to offer better protections to renters or people scrapping to lock down a place to live as average weekly prices continue to rise and vacancy rates hover at historic lows.

The struggle is real

Alejandro Maturana and his wife Stephanie Opazo moved to Adelaide from Queensland about a month ago.

They navigated a maze of informal and formal listings and inspected 20 properties in the city’s ultra-competitive market before nabbing a place to stay.

To get it, Alejandro and Stephanie said they adopted a “strategic approach” to win in the market.

“We opted to explore options on Facebook Marketplace,” Alejandro said of their experience.

“This avenue carries the risk of potential scams, often requiring a substantial six-week bond upfront.

“Initially, we booked a two-week stay in a shared house through Facebook Marketplace.

“Unfortunately, just a night prior to our scheduled arrival in Adelaide, the contact on the app informed us of the cancellation.

“We managed to secure temporary accommodation through a friend until we could find a more permanent solution.

“The initial days in a new city were undoubtedly challenging. We wasted no time and meticulously documented all our requirements on platforms such as 2Apply.com.au and tenantoptions.com.au.

“We diligently scheduled as many property inspections as possible, despite the limited availability and the challenge of co-ordinating timings, often resulting in multiple viewings on the same day or awaiting agent confirmation.

“After tirelessly inspecting around five houses per day for four consecutive days, efficiently co-ordinating locations to optimise our time, we found ourselves with four potential successful applications.

“The agents requested further information from us before accepting our applications.

“After a week of persistence, we were granted approval to rent a property. This outcome was not merely luck, it was a result of our diligent efforts and strategic approach in applying for properties with less competition during inspections.

The reforms

From March 1, rent price increases are now capped at one increase for every 12 month period.

There is a dramatic lift in penalties for landlords who discriminate against a potential tenant who has children, with the maximum fine rising from $2500 to $25,000.

And a landlord who falsely states he or she requires possession of a rental premises in order to terminate a tenancy can be hit with a maximum fine of $50,000 from an earlier maximum penalty of $2500.

The changes follow the illegalisation of rent bidding – the practice of landlords or real estate agents soliciting higher bids for a rental above the listed price – in September last year.

The change means landlords can no longer able to advertise properties with a rent range, put properties up for rent auction or solicit offers over the advertised rental price, with a penalty of up to $20,000 in place for breaches.

Later this year, a third tranche of reforms will stabilise the rental experience ever further.

South Australia will extend the notice period to end a tenancy from 28 days to 60 days, permit tenants to have pets in rentals with “reasonable conditions” and ensure rental properties comply with minimum housing standards.

Consumer and Business Affairs Minister Andrea Michaels said the government’s reforms struck the “right balance” between protecting both the rights of tenants and landlords.

“At a time when South Australian tenants are facing unprecedented levels of housing insecurity, we want to ensure tenants have the best possible protections in place including stronger rights, more financial stability and better long-term security,” she said.

“Landlords also deserve protection to ensure their property is being properly taken care of, which is why we have also increased penalties available for those tenants who fail to live up to their responsibilities.”

Tenants who intentionally cause serious damage to a rental property now face fine of $25,000 from $2500 before the changes.

What the numbers show

Data from SQM Research shows average weekly rents for both houses and units continue to rise across much of Australia.

Some cities have recorded double digit growth in rent prices in the past 12 months, including Adelaide, which recorded a 13 per cent rise in combined house and unit rent prices.

The average weekly rent price for a house in Adelaide is now $638, and $457 for a unit.

In Perth, rents have jumped 17.3 per cent in the past 12 months to hit $778 for houses and $580 for units.

In Sydney, Australia’s most expensive jurisdiction, prices have risen 11.1 per cent to hit $1054 for houses and $703 for units.

And rental vacancy rates continue to hover at historic lows, with the national vacancy rate at 1 per cent.

Adelaide has a vacancy rate of 0.5 per cent while Perth’s market is the tightest, with a vacancy rate of 0.4 per cent.

Sydney’s rate is 1.1 per cent.

Looking to the future, Alejandro said South Australia’s new measures would help out people like he and his wife.

“It’s good to have regulations in place,” he said.

“Scams and the lack of regulation in rented houses or rooms are issues prevalent in many places across Australia.

“Addressing these problems would significantly enhance safety measures and ensure a more secure procedure for finding accommodation.”