Housing is the foundation of our lives. Without a decent home, we cannot rest, prepare food, stay clean, raise families and engage in fulfilling activities. In a sense, housing is an essential service – if not the most essential one. Yet, to this day, there has been insufficient regulation of housing prices like we regulate prices of other essential services such as energy and water. 

Long overdue reforms to better regulate rent increases are finally in place in NSW. Shelter NSW commends the new regulations, which will provide much needed clarity and certainty to people who rent their home. 

Rules apply to all tenancies from November 2024, whether homes are rented under a fixed term or a periodic lease. Shelter NSW has long advocated that all people who rent their home should be afforded the same protections, and we welcome this rule. Fixed term agreements of less than 2 years entered before 31 October 2024 will continue to be subject to old regulations, allowing more than one rent increase within 12 months if agreed upon in writing including the exact amount. As those leases expire, all tenancies will be subject to the new rules.  

What are the new rules? 

• Rent cannot be increased in the first twelve months of a tenancy. 
• After an increase, rent cannot be increased again for twelve months. 

The detailed new rules can be accessed on NSW Fair Trading website. 

How can rent be increased? 

Landlords must notify tenants of rent increases at least 60 days in advance, and rent increases cannot be excessive. Tenants have the option of applying to NCAT if they believe a rent increase is excessive. The onus to prove this, however, remains with tenants.  

The Tenants’ Union of NSW has developed a ‘Rent Increase Negotiation Toolkit’ that includes postcode specific data on rents and can generate personalised letters to assist renters who have received notice of a rent increase and are considering negotiating with their landlord and/or applying to the Tribunal.   

A step in the right direction, but we must go further.

Clearer rules limiting the frequency of rent increases applying to all leases are a small step in the right direction. But we must go further to regulate rent increases fairly. Tribunal applications are complex and time consuming, and in tight rental markets, most tenants are unlikely to challenge excessive rent increases. 
 
Shelter NSW supports: 

• Clear regulation of what constitutes a fair and reasonable rent increase. Regulation could be based on CPI + a certain percentage, allowing landlords to set their price point within a range, similarly to the ACT model. 
• A shift of the onus of proof from tenants to landlords, requiring landlords who wish to increase rent over a defined threshold to provide reasons (e.g. significantly improved amenity over the last 12 months). 

While we welcome the recent changes, we will continue to develop proposals and advocate for better regulation of rent increases.