Melbourne’s auction market is under pressure, with one-bidder sales emerging as agents warn new reserve price laws could further strip competition.
The Allan Labor government’s plan to force sellers to reveal reserve prices early could trigger the “death of the auction” and trap sellers in a softening market.
Under the proposed shake-up, sellers would be required to publicly disclose their reserve price seven days before auction as part of the government’s underquoting crackdown.
The warning comes as Melbourne’s auction market is already under pressure, with a provisional clearance rate of about 59 per cent on Saturday and some homes attracting just a single bidder.
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The Victorian government has argued the reforms are aimed at improving transparency for buyers and addressing longstanding concerns around underquoting.
Woodards Blackburn director Cameron Way, who raised concerns about the proposal, said the move risked trapping sellers at exactly the wrong time.
“We’re already operating in a softening market, and the idea that a vendor would be required to disclose a fixed reserve price a week out effectively locks them in,” Mr Way said.
“If the proposal goes through as it’s currently framed, it will be extremely restrictive on vendors.”
Agents warn proposed reserve price laws could reshape Melbourne’s auction market as clearance rates ease and buyer activity slows. Picture: Ian Currie
Mr Way said forcing sellers to show their hand early could scare off buyers rather than improve transparency.
“If you anchor a reserve too early, you risk deterring buyers from even turning up,” he said.
“So while the intention might be transparency, the reality is it could reduce competition and distort the process.”
He said buyer trust in price guides had already eroded, with many building in a buffer above quoted ranges.
“Right now, many buyers automatically add 10 to 20 per cent to quoted ranges because they don’t trust them,” Mr Way said.
“That’s a broken system.”
Woodards Blackburn director Cameron Way says forcing vendors to reveal reserve prices early could deter buyers and “lock in” sellers in a softening market.
Mr Way said the focus should instead be on aligning vendor expectations with the advertised price range from the outset.
“At the point of listing, both the vendor and the agent should formally acknowledge that expectations sit within the quoted range,” he said.
“That creates accountability from day one while still allowing flexibility.”
He said clearly communicating that the reserve would sit within that range closer to auction would improve transparency without removing flexibility.
“It’s transparent, it’s fair, and it still allows market forces to do their job,” Mr Way said.
Mr Way also backed mandatory bidder registration, saying it would improve transparency without interfering with how auctions operate.
“I also believe it’s time that buyers are required to register to bid at a public auction,” he said.
“That will provide further transparency because agents and vendors will have a clearer understanding of who is genuinely in the market.”
Mr Way pointed to a campaign at 1 Manuka St, Burwood East, where the reserve was set at $1m on the day but the vendor retained flexibility to adjust if demand fell short.
“If we had publicly locked in $1m a week earlier, there’s a real chance some buyers wouldn’t have engaged at all,” he said.
“Then imagine the property sells at $970,000. Suddenly it looks like overquoting, even though the market simply shifted.”
Mr Way said if auctions were stripped of flexibility, more sellers would abandon them altogether.
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“If you remove flexibility and over-regulate the process, you risk pushing people toward private sales instead,” he said.
“At that point, you have to ask, why hold an auction at all?”
Ray White Mount Waverley’s Jacob Biviano said the single-bidder trend showed how fragile conditions had become.
His office sold seven of nine properties under the hammer, but four of those sales attracted only one bidder.
“The depth of competition has clearly thinned out,” Mr Biviano said.
“People are still interested, but they’re more measured and in many cases they’re keeping their hands in their pockets.”
Mr Biviano said locking in a reserve price too early removed the flexibility needed in a shifting market.
Ray White’s Jacob Biviano says buyer caution is growing, with some auctions attracting just one bidder as competition thins.
“The challenge with locking in a reserve price seven days out is that markets can shift quickly,” he said.
“In terms of a reserve range, I think that’s a more practical approach than a single fixed reserve.”
He also backed bidder registration, saying it would create a clearer and more structured auction environment.
“Registration provides clarity around who is genuinely in the market and helps streamline the process,” Mr Biviano said.
He pointed to an auction at 21 Mummery St, Mount Waverley, quoted at $2.15m to $2.25m, where a late second bidder pushed the final result to $2.72m.
Industry Insider Property director and prestige buyers agent Andrew Date says real market conditions may be weaker than headline figures suggest, with buyers becoming increasingly price-sensitive.
Industry Insider Property director Andrew Date said the headline clearance rate could be masking even weaker conditions, with final figures likely to fall closer to 45 to 50 per cent.
He said homes were still selling, but buyers had become far more price-sensitive, with many pass-ins now reflecting a gap between what vendors wanted and what buyers were willing to pay.
Mr Date said broader Victorian policy settings had already dented confidence among investors, with rising land tax and compliance costs acting as disincentives to property investment.
“At the end of the day, affordability is a supply problem,” Mr Date said.
“We simply do not have enough housing to meet population growth.”
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