New laws in Victoria that took effect at the start of October require real estate agents to publish the reserve price at least a week before an auction and disclose the final sale price for at least 18 months after the transaction.
The changes, being watched closely across Australia, are designed to stamp out underquoting: marketing a home well below its expected sale price to artificially inflate interest and auction turnout.
Consumer Affairs Minister Paul Edbrooke said buyers had been the losers under the old system. "Victorians are sick of wasting their weekends chasing homes they were never going to get," he said.
The Real Estate Institute of Victoria (REIV) agrees the problem is real but opposes the law's design. "If you look at the problem that was trying to be solved, egregious underquoting, and the results, people wasting their time and money on getting things like building reports, that's a good thing," chief executive Toby Balazs said. "We just don't think this is the way to do it."
The institute argues buyers should get guidance on the likely range a property will sell for, not the precise reserve figure. With most campaigns running about a month and the reserve due seven days before auction, Mr Balazs said there was little time to gather feedback from potential buyers. "What you're probably going to get is overquoting … because if I [quote] over, it's easier to come down," he said. The seller "has a right to manage what is the sale of, most likely, their biggest asset".
Independent property economist Cameron Kusher welcomes the attack on underquoting, which is generally illegal across Australia, but does not believe these particular laws will achieve it.