A candidate in the upcoming New South Wales state election who believes tenants are getting a raw deal in an overstressed housing market has proposed rent control as a solution, but the Real Estate Institute of New South Wales has labelled the idea misguided. "Rent control would take us back to the dark ages," said REINSW President Malcolm Gunning in response to a housing policy released by NSW Greens candidate Jenny Leong.

Leong, who is running 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. “I think it’s pretty clear to everyone that Sydney is becoming one of the most expensive places to live in,” Leong told news.com.au. “There’s been a real shift to where long-term renting is the norm.” An International Monetary Fund report from November found that the ratio of housing prices to average incomes was 31.6 per cent above the historical average in Australia.

However, Gunning said that moving to a regulated environment means tenants would lose the ability to negotiate and mum and dad investors, rather than big business, would suffer. "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 rental market is no different to any other market; it is driven by supply and demand," said Gunning. "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," said Gunning.

Under the NSW Greens policy, landlords would not be allowed to evict renters without a valid reason, but Gunning said protections for tenants are already in place as tenants can go to NSW Fair Trading for dispute resolution. He labelled the proposal "a narrow-minded view based on one suburb that is one of the most popular in Australia."

Gunning said the policy also does not reflect a lot of areas throughout NSW that are struggling.