Victorians will no longer face going to auctions blind to the homesellers desired price.
Victorian homeowners will be banned from putting their homes under the hammer unless they disclose their reserve price ahead of the auction under a government policy being announced today.
The state government is expected to announce an overhaul to Victorian underquoting legislation later this morning, with the Premier Jacinta Allan-led government requiring reporting mandatory reserve disclosures will be a part of the changes.
That idea was a core suggestion from the Underquoting and Integrity of Auctions Forum covered by the Herald Sun in 2023, and has been called for over a period of decades by elder statesmen of the real estate industry as a solution to underquoting.
RELATED: Major real estate reform revealed to combat Victoria underquoting
2025: The Melbourne suburbs where underquoting will surge this spring
Consumer Affairs Victoria cracks down on dodgy comparable sales
Despite the extra workload, Consumer Affairs Minister Steve Staikos was unable to commit any new resources to the already stretched Consumer Affairs Victoria’s underquoting taskforce for enforcement.
He said the new laws would only apply to auctions and fixed sale dates.
Mr Staikos assured buyers that the reserve price would be “very, very clear” to consumers.
Asked why the government had landed on seven days, he said it gave both vendors and buyers an appropriate amount of time.
Victorian Premier Jacinta Allan and her government expect to introduce the new underquoting bill in 2026. NewsWire/Luis Enrique Ascui.
“A property sales campaign is typically four weeks so it means that vendors have a few weeks to properly assess the level of interest in their property, and seven days is a good amount of time for prospective buyers to make a final decision on whether they continue to pursue this property, on whether they decide to invest in a building inspection,” he said.
Premier Jacinta Allan said her government was sending ending a “very clear message” to real estate agents.
“I want an auction system that makes it fairer and more transparent,” she said.
“We know that the current way that reserve prices are said is not fair.
The Bill will be introduced midway through next year.
Victoria is known as Australia’s auction capital with more than 1000 auctions typically held each week during the busy spring selling period.
Opposition leader Jess Wilson said while she supported more transparency the government was simply “tweaking around the edges”.
“(This will) do nothing to actually tackle the unaffordable nature of housing in the state,” she said.
“We know that when a new home is built, over 40 per cent of the cost of that is taxes, fees and charges at the hands of the Labor government.
“This is what is driving up property prices and making it impossible, particularly for first home buyers.”
Greens MP Gab de Vietri claimed credit for the move as she welcomed the reforms.
“It is a testament to the Greens power,” she said.
“We take the good ideas, we put them on the table, and it’s great when Labor snaps them up.”
According to the Real Estate Institute of Victoria, almost a third of complaints made to the Consumer Affairs Victoria’s underquoting taskforce are lodged by real estate agents.
New Real Estate Institute of Victoria president Toby Balazs said he strongly denounced any form of unlawful underquoting and the Institute was committed to an effective, sector-wide solution.
However, an REIV statement cautioned the government over an “overly narrow and reactive approach”, and indicated they had a working group in place to tackle the issue.
“We have been developing suitable solutions that strike the right balance between greater price transparency and protecting a vendor’s right to achieve the best possible price,” Mr Balazs said.
“We look forward to publishing the Strategic Working Group’s recommendations. Informed by extensive stakeholder input, the Group’s report will aim to guide the more nuanced regulatory response required to give buyers increased price transparency without compromising vendor rights.
“Having positively liaised with the Victorian Government as part of our Strategic Working Group activity, and the Government’s own underquoting reform consultation process, the REIV and its members remain committed to being part of the solution.”
Victorian Opposition leader Jess Wilson said the changes would not do anything to tackle the unaffordable nature of housing in the state. Picture:NewsWire/Ian Currie.
The Institute also noted that close to a third of complaints to Consumer Affairs’ underquoting task force were coming from real estate agents, showing that they agents were committed to changing standards.
Their statement also indicated that they support price transparency, but described today’s government announcement as a “disproportionate response” and warned it risked “disadvantaging vendors”.
The REIV convened a discussion of disclosing vendor reserves in 2023, headed by former president Robyn Waters, but rejected the concept.
However, at the time of the 2023 forum senior agents from across Victoria did support the concept.
They included Terry Sparks, Garry Nash, John Spragg and Rosemary Jamonts.
The 2023 forum also called for the naming and shaming of agents caught underquoting.
Long-time underquoting battler Keatings Real Estate’s John Keating convened the 2023 forum and said the inevitable had happened, but that there was still some ground to cover.
The idea of disclosing auction reserves has been around in Victoria since the 1980s.
“It’s obviously a huge breakthrough for transparency and thinking from the regulatory authorities, but it’s still not going to stop people from being underquoted for the first three weeks of the campaign,” Mr Keating said.
“There’s no need for it to be delayed until one week before the campaign.”
The agent first began disclosing his vendor’s reserves ahead of auctions in 1984 and has sought the change since then.
David Morrell has fought against underquoting for 25 years and said the government plan was “the biggest change since they outlawed dummy bidding”.
“The people that will be happy are the public,” Mr Morrell said.
“The only people who will be ducking and weaving are agents.
“But it’s still not going to stop underquoting.”
Mr Morrell noted there were other sales methods available to agents that could largely mimic an auction, but would in theory avoid the need to follow the new rules.
Property Investment Professionals of Australia chair and prominent Melbourne Buyer’s advocate Cate Bakos said it would be the biggest reform she had ever seen.
“That means buyers who are in doubt about the real vendor expectations will be better able to conduct their due diligence in that last week,” Ms Bakos said.
“The other thing it might do is generate some sales prior to auction.”
While she did not believe it would turn Victorians off of auctions, she also did not believe it would stop homes surging to unexpected highs.
”The reserve doesn’t dictate the selling price; in a hot market, the vendor can be justifiably optimistic of getting more,” Ms Bakos said.
“We will always see homes sell above reserves, so I don’t think it will extinguish auction activity or take away Melbourne’s crown as the nation’s auction capital. But it will be a game changer.”
Buyer’s agent and president of the Real Estate Buyers Agents Association of Australia Cate Bakos has seen a lot of Sydney resident buying real estate in Melbourne. NSW real estate.
However, while she said vendors should have a right to receive market feedback before setting a reserve, she did warn that a week may not be a lot of time for the average buyer to undertake due diligence on a home unless they had access to sophisticated networks of professionals to assist them.
Earlier this month the Victorian government announced changes to comparable sale selection, which would make it harder for agents to promote inaccurate price guides by requiring they follow a more detailed checklist when selecting homes for this purpose.
The Herald Sun has sought contact from a variety of industry groups.
-Additional reporting by Carly Douglas.
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: 2025: Victorian homebuyers warned unquoting is on the rise by property experts
2023: Real estate underquoting: Fines spike amid crackdown on dodgy Victorian agents
2023: Call to name and shame, disclose reserves in bid to finally nail underquoting
English (US) · 