From October, Victoria will ban rent bidding – a practice where renters are pressured or encouraged to offer above the advertised rental price. The change aims to reduce unsustainable rent increases and ease the state’s housing affordability crisis.
Key Takeaways
- Rent bidding – where tenants offer above advertised rent – will become illegal in Victoria from October 2025.
- New laws prohibit landlords and agents from encouraging or accepting offers above listed rent.
- Vacancy rates below 1% in many Melbourne suburbs continue to drive rental competition.
- Landlords should review their rent pricing strategies to comply with regulations and avoid penalties.
- Securing long-term, reliable tenants is now more valuable than ever.
What Is Rent Bidding and Why Is It Banned?
Rent bidding occurs when prospective tenants either:
- Feel pressured by landlords or agents to offer above the advertised rent, or
- Voluntarily bid higher to beat competition in a tight rental market.
The Victorian Government has deemed the practice unfair, as it pits tenants against each other and drives rent prices to “unreasonable heights.”
From next month, all forms of rent bidding will be outlawed. Agents and landlords will be prohibited from encouraging or accepting offers above a property’s fixed listed rent.
Why Is Rent Bidding So Common in Melbourne?
The ban doesn’t come in a vacuum. Rent bidding has surged due to record-low vacancy rates.
- In many parts of Melbourne, the vacancy rate sits below 1%.
- Housing shortages, planning delays, red tape, and falling investor activity have all constrained supply.
- Queues of renters at inspections are now commonplace, with desperate applicants willing to pay above asking price.
What Landlords Need to Know
The new legislation carries heavy penalties for non-compliance. Landlords should:
- Ensure their property managers are across the new rules.
- Reassess rent pricing strategies – once a property is listed, the advertised rent is the maximum they can expect.
- Focus on maintaining properties to attract quality long-term tenants.
Why Reliable Tenants Matter More Than Ever
With these new restrictions and other rental reforms in place, landlords will increasingly benefit from tenant security over short-term rent hikes.
A well-maintained, fairly priced property occupied by a responsible tenant is the best strategy to reduce vacancies and maintain stable rental income in Melbourne’s evolving rental market.
