Housing policy released by NSW Greens candidate Jenny Leong shows a clear lack of understanding of the property market, according to the Real Estate Institute of New South Wales.
The candidate for the newly drawn seat of Newtown proposes to cap rent rises at the rate of inflation or the consumer price index, and allow landlords to impose only one increase in rent per year.
REINSW President Malcolm Gunning said the policy released on Thursday (5 February 2014) was misguided.
"It is a narrow-minded view based on one suburb that is one of the most popular in Australia," Mr Gunning said.
"The rental market is no different to any other market; it is driven by supply and demand. The rental market can be very fluid and open in high demand areas, where tenants drive the rent up by outbidding each other. In not so popular markets, tenants ask for lower prices; they are very savvy and know they can negotiate terms.
"If we move to a regulated environment, tenants would lose the ability to negotiate and as a result mum and dad investors would suffer rather than big business as suggested by the Greens' policy.
"It needs to be clearly understood that people who buy rental properties are investors. They expect to make both income and capital returns on their investments. If the market becomes even more regulated than is already is, those investors will go elsewhere and that will be bad for tenants.
"The policy also does not reflect a lot of areas throughout NSW that are struggling. Rent control would take us back to the dark ages."
Under the NSW Greens policy, landlords would not be allowed to evict renters without a valid reason, however Mr Gunning said that this is already in place.
"Protections for tenants are already in place. They have clear rights and can go to NSW Fair Trading for dispute resolution," Mr Gunning said.
For further information or to speak with REINSW President Malcolm Gunning, please contact Helen Hull at [email protected] or on 0419 642 961.