Victorians can now see a home’s reserve price before auction. What does this mean for buyers and sellers?

Within days of Victoria requiring sellers to reveal their reserve prices before an auction, property agents started testing workarounds.

Market participants say there is already a pivot toward open-ended expressions of interest campaigns that allow sellers to keep their reserve price hidden. There is also a noticeable shift away from auctions to private sales.

By introducing stringent transparency laws to combat widespread underquoting, Victoria’s property reforms are shaping up as a test case for the rest of Australia.

Here’s what is happening in the early weeks of the new system.

Underquoting reforms

The Victorian laws that took effect this month include three primary changes:

• Publish the reserve – the lowest price a seller is willing to accept – at least one week before an auction or fixed-date sale. (If the sale process is open-ended, a reserve doesn’t need to be made public.)

• Provide prospective buyers with additional market context, including nearby comparable sales.

• Publish property sale prices after a transaction is completed.

The laws are some of the most progressive in the world, and aim to eliminate underquoting – sometimes known as “bait pricing” – which is the practice of marketing a property well below its expected sale price to artificially inflate buyer interest.

Nicole Jacobs from buyer’s agency Cohen Handler says she is seeing agents run expressions-of interest-campaigns with no fixed end date to avoid publishing a reserve.

“Selling agents at the moment are sitting down with their vendors saying, ‘OK, we can do an expression of interest campaign and not have an end date, and then we don’t have to disclose a reserve price’,” says Jacobs, Cohen Handler’s managing director for Victoria.

“They are also doing more private sales, and again, with no date, so therefore they don’t have to disclose a reserve. That’s what I’m seeing.”

Jacobs says that while underquoting needs to be confronted, she says it’s too soon to tell if the reforms will fix the problem.

“There’s so much going on that needs to be unpacked, and we probably need more time to see how it works,” she says.

Reserve prices

Other jurisdictions have tried, with varying success, to combat underquoting and other poor practices, with the UK requiring the reserve price, which is private, to be capped within 10% of any single-figure guide price.

NSW policymakers have increased fines for so-called “dummy bidding” – an undisclosed bid to help the seller – and underquoting, while pushing for more realistic price guides.

Real estate agent representative bodies in Victoria have been highly critical of the state’s changes, arguing that they are confusing, add complexity and are suppressing an already dour market.

For example, given the Victorian system requires a published reserve at least seven days before an auction or fixed-date bids, a sale would need to be rescheduled if the seller changes their mind about the reserve in the final week.

There is some nuance in the reforms, given the seller retains control on auction day to reject a bid even if it is higher than the published reserve.

Veteran agent John Keating, a strong supporter of the reforms, warns that if sellers started to regularly reject the highest bid after a reserve is passed, it would show “agents and auctioneers are complicit in working with vendors to abuse the system”, requiring regulatory attention.

Keating says he has seen new examples of potential underquoting, with some agents using low price guides early in the campaign to generate interest, only to dramatically increase the figure when the reserve is finally published.

Price guides

Victoria requires selling agents to include a “property price statement” (PPS) in online advertising that includes details of comparable nearby sales, an important tool for prospective buyers to value a property.

Unlike the reserve, which is the minimum amount a seller is willing to accept, a PPS is the initial estimate used by an agent to guide buyers.

Analysis by Guardian Australia has found numerous examples of selling agents claiming that no comparable sales exist over the past six months when, in many cases, there are many.

In one example in the suburb of Tarneit, a high-turnover outer-suburban commuter hub, one agent claims in a PPS that no comparable properties exist, despite an almost identical three-bedroom project home selling on the same street in late September.

There were also several other very similar homes recently sold on nearby streets, showing that even the best intentioned reforms require enforcement.

The changes come during a subdued period for the property market, with Melbourne prices down almost 7% from their December 2025 high, according to Domain.

While auctions are very popular in Melbourne and Sydney, most other parts of the country favour private sales.

During downturns, agents tend to favour private sales as bidding interest wanes even in states where auctions are usually preferred.

Data from Cotality shows that auction volumes in Melbourne fell sharply on the 17-18 October weekend, which represented the first auctions with published reserves, showing unease among sellers.

However, clearance rates – representing the percentage of properties successfully sold at auction – were higher than the prior week.

Cotality notes that the “fall in auction volumes could be a short-term disruption rather than a sustained retreat” with numbers bouncing back for the 24-25 October weekend.

Keating says there’s an “air of inevitability” that the Victorian reforms will be adopted elsewhere.

“This may take some time to settle down in Victoria, but when agents get their heads around the benefits of a transparent system, it’ll become very popular, and I believe will inevitably be picked up by the other states,” he says.