Consumer and Business Affairs Minister Andrea Michaels said this morning that the state government will introduce legislation proposing reforms to the Residential Tenancies Act 1995, following a review of the law which began in November.

To be introduced to parliament next week, the legislation will outlaw landlords from encouraging tenants to offer above the advertised price to secure a rental property, known as rent bidding, with punishments of up to $20,000 for non-compliance.

It will also ban landlords from offering properties with a rental price range or putting them up for a “rent auction”.

Michaels’ office said the reforms will also prevent a third party from assessing a tenancy application based on a tenant’s capacity to offer higher rent.

However, it will not prevent tenants from putting in an unsolicited offer above the asking price.

Michaels defended not outlawing unsolicited offers, arguing evidence from Victoria suggested that the rent bidding ban would have enough of an impact.

“That’s a difficult situation in a private rental market where a tenant wants to offer more, are you effectively penalising the tenant who does offer more?” she said.

“So we’ve used the model of Victoria, it’s worked over there, we’re hoping it has the same impact here.”

It comes as rental prices continue to soar in Adelaide. Figures released by property research firm CoreLogic in January show the median rent in Adelaide reached $518 for the December 2022 quarter – up 12.9 per cent across 2022.

Adelaide’s 12.9 per cent increase in median rental prices was the second-highest annual increase in an Australian capital city last year.

The reforms also seek to make lodging a bond more affordable for tenants.

Currently, tenants can be required to lodge a bond equivalent to six weeks of rent if the landlord is charging more than $250 a week.

The proposed reforms would see the minimum threshold for six-week-equivalent bonds lifted to $800 a week, meaning the majority of tenants will only have to pay a four-week equivalent bond.

“That $250 rent per week figure hasn’t been adjusted in decades,” Premier Peter Malinauskas said this morning.

“In essence, we are eliminating a lot of people from the rental market who are locked out simply because they can’t afford six-weeks bond.”

Michaels said the change would save tenants “on average $1000” when they enter a new property.

The review of the Residential Tenancies Act 1995, conducted by Consumer and Business Affairs, examined changes to a wide range of issues in the rental market, including renting with pets, residential bond processes, housing standards and retaliatory evictions.

Greens MLC Robert Simms flagged this morning that his party would be pushing “a raft of amendments” to the government’s legislation to enshrine more wide-ranging protections and “bring SA into line with other states”.

“We are definitely supportive of banning rent bidding (it was part of our election platform) but I’m keen to ensure action on the other elements of the system that are stacked against renters,” he said.

“We should have a presumption in favour of renting with pets, an end to no cause evictions.

“We will also amend the legislation to provide rent capping. We need action on prices as they are continuing to skyrocket.

“I also want to ensure renters’ data is protected.”

Malinauskas said the reform proposal did not include rent capping.

“A landlord is welcome to set a rent as high as they believe they can reasonably get,” he said.

“But that signal to the market should represent what the actual cost is of renting a property as distinct from putting a price out there and seeking to gouge the market through the practice of rent bidding.”

Michaels also said new data protection measures for tenants would be enshrined by the reforms.

“We’re going to reduce the amount of information landlords and agents can ask for in a rental application,” she said.

“We’re going to go out and consult on what exactly that information is, but we’re essentially looking at areas that are discriminatory under equal opportunity legislation.”

She also said landlords would be required to delete personal information supplied by successful tenants within three years, and within 30 days for unsuccessful tenants.

Michaels’ office said “further work” was being done on “additional changes” to improve protections for renters this year.

In a government-issued media release, Real Estate Institute of South Australia CEO Cain Cooke said his organisation supported the ban on rent bidding.

“These provisions will ensure clarity and transparency for tenants and enable them to lodge an application with certainty as to their capacity to meet the rental affordability of the property,” he said.