As a tenant or a landlord in New South Wales, it’s essential to know how much house rent can rise per year. Understanding the regulations and factors affecting rental increases will help you make informed decisions and maintain a smooth rental relationship. So, how much can house rent rise per year NSW?
In this article, we’ll explore the factors that influence rent increases, the relevant regulations, and how to negotiate rent increases in NSW.
Factors affecting rent increases in NSW
Whether it’s your first time renting or 20th, here’s what might impact the cost of renting:
Fixed-term agreement vs periodic agreement
In New South Wales, tenants can choose between fixed-term and periodic leases. Fixed-term agreements have a specific start and end date, while periodic agreements run indefinitely until either party ends the agreement. The type of agreement you have can impact rent increases, with different rules for each type.
Canberra’s consumer price index
The Consumer Price Index (CPI) calculates the average price changes in a basket of consumer goods and services. In Australia, Canberra’s Consumer Price Index is used as a reference for rent increases across the country. The CPI takes into account inflation and other economic factors, affecting rental prices in NSW and other states.
According to the September 2023 report, Canberra’s CPI increased by 4.5% through the year and by 1.2% in September, driving up prices of rent, electricity and fuel. This index is subject to change and we recommend keeping an eye out on report releases to stay in the loop.
Local Market Conditions
Rent hikes may also be affected by local market factors like supply and demand. Factors like population growth, employment opportunities, and the availability of rental properties can impact the local market, leading to changes in rental prices.
For instance, there was a rent increase freeze in Victoria during the pandemic that put a halt to rent increases. This would’ve impacted payments from tenants to landlords. That’s why it’s essential to consider these factors when discussing rental increases.
Rent increase regulations in NSW
Rent increase notice
When increasing rent in New South Wales, landlords must notify tenants in writing. For fixed-term agreements, landlords must give at least 60 days’ notice before the rent increase takes effect. For periodic agreements, the notice period is also 60 days.
It’s crucial for landlords to comply with these regulations to avoid legal issues.
But it’s also up to the landlord how much they increase rent. And they should consider why landlords shouldn’t always increase the rent, just because they can.
Maximum rent increase for fixed-term tenancies
For fixed-term tenancy agreements in NSW, there are limitations on how much rent can be increased. The lease agreement should specify the maximum permissible rent increase. Unless otherwise specified in the lease, rent increases may occur no more frequently than once per calendar year.
Rent increases for periodic tenancies
In the case of periodic tenancy agreements, rent increases are limited to once every 12 months. It’s essential for both tenants and landlords to understand these rules and comply with them to ensure a smooth rental experience.
Negotiating rent increases
Comparing similar properties
When negotiating rent increases, it’s essential to research if rental properties exist that are similar in the area. You can gauge if the requested rent increase is reasonable by comparing the subject property to others like it in the area.
Tenant written notice
Tenants can use a written notice to request a rent review if they believe the proposed and current rent difference is unfair. In the notice, tenants can present evidence of comparable properties and make their case for a lower rent increase.
Lease extensions and new agreements
Extensions or a new fixed-term lease can impact rent negotiations. Both parties should consider factors like market conditions, the property’s condition, and the tenant’s rental history when negotiating a lease extension or new agreement.
More on rent rise per year in NSW
What is the average rent increase per year in NSW?
In NSW, the median rent increase per year varies depending on factors like market conditions and property type. However, generally speaking, rent increases tend to range between 2% and 4% annually.
Can a landlord increase rent without notice in NSW?
Landlords in NSW are required to provide tenants with a written rent increase notice before raising the rent. For both fixed-term and periodic agreements, the notice period is at least 60 days. Failure to provide proper notice can lead to legal issues for the landlord.
Can a tenant dispute a rental increase in NSW?
Tenants in NSW have the right to dispute a rent increase they believe is unfair. They can do this by submitting a written notice to the landlord, presenting evidence of comparable properties, and requesting a rent review. Tenants who are unable to resolve their disagreement amicably may seek help from the NSW Civil and Administrative Tribunal.
How much notice do I need to give my landlord NSW?
Depending on whether your contract is fixed-term or periodic, tenants usually have to give at least 21 days notice to your landlord in NSW.
