Auction ban for homes without published reserve under new underquoting crackdown

Victorian buyers will soon be able to see a home's reserve price a full week before auction day, under sweeping reforms set to be unveiled today.

This signals a major shift the Allan government says will finally crack down on rampant underquoting, but which the state's peak real estate body, Real Estate Institute of Victoria, warns could unfairly penalise vendors.

In a press statement released this morning, the Allan Labor Government says too many young Victorians and families are wasting their Saturdays at auctions, chasing the dream of home ownership, only to find the property sells for far more than its advertised price.

Under current rules, vendors can set their reserve as late as auction day and at a level higher than the quoted range, leading many buyers to turn up to auctions for homes they were never truly in the running for.

Under the new Australian-first laws, introduced next year, agents will be legally required to publish a property's actual reserve price at least seven days before an auction or fixed-date sale.

If they fail to disclose the reserve within that timeframe, the property cannot proceed to auction or be offered for sale. Agents must also update all marketing materials to include the reserve price and immediately cease using any outdated advertising.

The government says the change will make the stressful process of buying a home "fairer and more transparent", giving buyers confidence that the advertised price aligns with the true reserve when bidding begins.

The reforms build on recent changes introduced earlier this month, which significantly tightened guidelines for selecting comparable sales.

Agents must now rely on the most appropriate and genuinely comparable properties when determining a price guide, setting clearer expectations of accuracy and strengthening protections for buyers.

Consumer Affairs Minister Nick Staikos said these measures, combined with stronger price-guide rules, will give buyers a more accurate understanding of what constitutes a reasonable sale price ahead of auction day.

"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."

The government has also made Victoria's underquoting taskforce permanent. Since its creation, the taskforce has issued more than 200 infringements totalling more than $2.3 million in fines, enforcement the government argues demonstrates its commitment to stamping out misleading price tactics.

"This is just one of the ways we're stamping out underquoting, with the taskforce using a range of methods to monitor the market, including tracking sales campaigns, inspecting agencies and attending auctions," Staikos said.

REIV warns of unintended consequences

But the Real Estate Institute of Victoria, which has been working with the government on a separate reform package, says the mandatory reserve-price disclosure goes too far.

REIV CEO Toby Balazs said the institute strongly opposes unlawful underquoting and is committed to a sector-wide solution to stamp it out.

He noted that more than 30 per cent of underquoting complaints to the taskforce have come from agents themselves, clearly demonstrating the industry's willingness to address the issue and lift standards.

The REIV supports greater transparency but argues that forcing reserve prices to be published a week out risks disadvantaging vendors and weakening their ability to achieve the best sale outcome.

"We have been developing solutions that strike the right balance between greater price transparency and protecting a vendor's right to achieve the best possible price," Balazs said.

"We look forward to publishing the Strategic Working Group's recommendations, which will guide the more nuanced regulatory response needed to give buyers clearer information without compromising vendor rights."

Balazs added that the REIV has "positively liaised" with the government throughout the underquoting reform process and remains committed to being part of a balanced solution.

Marketing rules to tighten further

Under the overhaul, agents will be required to promptly update every piece of marketing once the reserve is published, ensuring buyers never see outdated price information.

Earlier reforms tightening comparable-sales selection also remain under review, with Staikos signalling he is open to further adjustments once the new laws take effect next year.

"Buying a home is one of the biggest decisions many Victorians will make and it's already a stressful enough process without misleading and dishonest price estimates," he said.