Login
Victorian sellers warned: New auction rules could shrink sale prices
Victorian vendors might see their property sales price dwindle as new rules requiring agents to publish reserve prices seven days before auction may lead to higher reserves and weaken buyer competition.
Victoria’s government has unveiled new reforms in its ongoing underquoting crackdown, requiring agents to publish a property’s reserve price at least seven days before auction and ensure all marketing reflects it, as fines and enforcement ramp up.
The new rules to be introduced in parliament next year will require agents to publish the property reserve price publicly at least a week before the auction or fixed-date sale.
Currently, Victorian sellers can wait until auction day to set a reserve or asking price above the advertised range, which the state said has left many potential buyers turning up to bid on homes that are actually beyond their budget.
Minister for Consumer Affairs Nick Staikos said the reform will make buying a home fairer and more transparent, ensuring Victorians can trust that the advertised price aligns with the actual reserve when bidding begins.
“Underquoting isn’t fair, and it’s young Victorians and families paying the price. That’s why we’re stamping it out by requiring reserve prices to be published at least seven days before an auction,” Staikos said.
Founder of Flynn Estate Agents and auctioneer Adam Flynn said the proposed reform “has gone too far” and goes against the role of real estate agents, which is to act in the interests of the vendors.
“As agents, our job is to work for the vendor, to get the highest possible price and negotiate on their behalf,” Flynn said.
“There’s a clear reason reserve prices are kept confidential – they can significantly impact the final outcome.”
“When a property exceeds its reserve with intense bidding and buyers keep competing, there’s no preset notion of whether the price is too high.”
Flynn said the proposed reforms will also affect market prices, as vendors will likely set their reserves higher than usual.
“In many cases, vendors will set their reserve too high because they've lost the flexibility of being able to be fluid during an auction, they've been forced to lock themselves in to a price, and then they'll end up setting their reserves closer to their dream price as opposed to an intelligent and considered strategic reserve price.”
According to Flynn, the overall impact could see clearance rates decline and vendors potentially earn less.
“The reserve price creates fierce competition, and what would have been the highest bidder might get scared by it and ultimately not bid on the property,” Flynn said.
The new guidelines come amid a period of rapid reforms in Victoria, including recent changes to rental laws and taskforce crackdowns, to ensure agents remain compliant.
Earlier this month, the government had already introduced new guidelines for agents requiring listings to reflect comparable local property prices before auction.
The state government said the new rules are part of a broader push to end underquoting, making the task force permanent to ensure ongoing, hands-on enforcement.
So far, the Victorian underquoting task force has issued over 200 infringements totalling more than $2.3 million in fines.
