Under new Victorian laws that took effect, sellers can no longer use pricing estimates expressed as a range or with the word "from" and must instead set and disclose a specific reserve price. The laws also require the sale price to be published for at least 18 months after a sale, ABC News reported. The legislation passed through the state parliament in September.
The Victorian government introduced the laws to address underquoting, whereby sellers set reserve prices well above what had been advertised, leaving buyers who attended auctions surprised by the gap. Underquoting, where agents advertise a property at a price below what the seller will actually accept, is broadly prohibited across Australia but enforcement and legislative approaches differ by state.
Melbourne-based buyer's advocate Emily Wallace told Yahoo Finance that compliance among sellers had been observed under the new rule since it came into force. Wallace said an important metric going forward would be the gap between the disclosed reserve price and the final sale price, raising the question of whether a property that sells above its reserve but below what it was worth all along represents the problem being solved. Wallace said it was not yet clear whether auction attendance would rise or fall, but that those who did attend would be more committed to bidding rather than merely observing.
Melbourne buyers agent Dion Marsden, when the law passed parliament, described it as a bad move with good intentions and expressed concern that vendors would set higher reserve prices as a buffer, potentially causing buyers to later discover they could have paid less. Andrew Lowcock, Victorian deputy executive director at the Property Council of Australia, said transparency measures alone would not fix housing affordability, and named supply and demand as the main forces driving prices.
New South Wales has not adopted equivalent laws but has been pursuing underquoting through a Name and Shame register introduced in February, which publicly lists fines and breaches by real estate agents and strata managers. NSW Fair Trading conducted 131 inspections between July and September, issuing 31 penalty notices totalling more than $68,000. No other state has indicated it plans to introduce laws similar to Victoria's.
Homebuyers participating in Victorian auctions will now be able to see the seller's specific reserve price at least seven days before auction day, replacing the previously common practice of price ranges or indicative estimates. Sale prices for Victorian properties will be publicly available for at least 18 months after each transaction, providing buyers with more post-sale data.
Reporting: ABC News, Yahoo Finance
Written by Pick & Scroll News from the reporting and documents linked above.
