West Australian renters could be allowed to transfer their bond between properties under a proposed rental reform that the McKell Institute says would remove a major upfront cost for people moving home or changing jobs.
The think tank’s WA branch is urging the Cook Government to introduce a portable bond scheme, following similar measures introduced in Victoria and New South Wales this year. South Australia has also funded a scheme.
At Perth’s median advertised rent of $750 a week, a standard four-week bond is about $3,000. Renters must currently find that money for a new property while their existing bond remains tied up, pending any claims relating to their previous tenancy.
More than 60,000 tenancies end in Western Australia each year, according to the institute’s Make it Portable report. The typical lease lasts for less than two years, while rents have risen by 6.9 per cent a year since the Covid-19 pandemic, it said.
Jessica Bukowski, executive director of the McKell Institute WA, said the need to fund two bonds could discourage people from moving for work or relocating to communities where they wanted to live.
“For many West Australians, moving for work or a new home means finding thousands of dollars for a new bond while the old one is still tied up,” she said. “With the median Perth rent at $750 a week, that is a real cost, and it falls on the people the state most needs to attract and retain.”
Ms Bukowski said Western Australia was competing with other states and overseas for tradespeople and essential workers, many of whom were younger renters.
“A rental system that asks people to fund two bonds just to move makes WA a less flexible place to work,” she said. “A portable bond, delivered alongside a modernised bond lodgement system, is a practical, modest-cost way to help workers move to where they are needed.”
Call for interest on rental bonds
The institute is also calling for changes to the way bonds are managed, including an option for tenants to earn interest while their money is held by the state’s Bonds Administration.
Its modelling suggests a $3,000 bond could generate more than $5,000 in returns if invested in an option comparable with a conservative superannuation fund, or $14,000 in a higher-risk option.
Under the proposed system, renters would have the option of paying their bond directly to Bonds Administration rather than passing it through a landlord or real estate agent.
“A renters’ dividend would return it to the tenant, and give them something to show for their years in the rental market. WA could be the first state to deliver it,” Ms Bukowski said.
The Real Estate Institute of WA has backed the idea. Its president, Rob Mandanici, called for a bond portability scheme in the organisation’s pre-budget submission, suggesting tenants could transfer bonds between eligible tenancies for a small fee.
Western Australia’s Commerce Minister, Tony Buti, was approached for comment.
