Will Victoria's new reserve price law stop underquoting?

Updated 3 November 2026 with the latest figures.

In the law's first week, a two-bedroom unit at 1/31 Windsor Avenue, Strathmore, was listed for auction with its reserve on the internet: $850,000.

A month earlier, Melbourne buyers would have seen only a guide of $840,000 to $880,000, Domain reported on 14 October. Its agent, Julia Murphy of McDonald Upton, said the change had “been welcomed by everyone so far”.

Since 16 October, every Victorian auction and fixed-date sale must publish the seller's reserve as a single dollar figure at least seven days out. Miss that and the sale cannot go ahead. Underquoting (advertising a home well below what the seller will accept, to pull a crowd) has survived nearly a decade of crackdowns.

So is this the one that works?

For the classic auction trick, mostly yes. For underquoting as a whole, no: the rule covers a shrinking share of sales, and enforcement has been the weak link for years. Confidence: Likely.

The old trick needed a gap between the advertised range and the seller's real number. The new law makes the seller name that number in public, in writing, a week ahead. If the seller changes it, the seven-day clock restarts.

The first listings look honest. The Strathmore reserve sat $10,000 under the middle of its old guide. On The Block's Mount Eliza homes, the published $3.45 million reserves sat below guides of $3.6 million to $3.9 million, Real Estate Business reported on 30 October.

Low guides work because they anchor bids. In Dublin auctions from 2004 to 2006, guides sat about 24% below value on average, and winning bids tracked them closely, a 2022 study found.

Publishing real numbers seems to help. After Scotland made sellers publish a Home Report with a valuation, asking prices in Aberdeen tracked nearby sales more closely, a 2022 study of 79,000 sales found. The authors judged that artificially low asking prices became less common, though not rare.

That is the front door. The trouble is the side doors.

The reserve rule binds only auctions and fixed-date sales. Consumer Affairs Victoria treats a pre-auction offer as a private sale, so an agent can accept it without the seven-day wait. Off-market sales need no published reserve at all.

The first data shows sellers stepping around the rule. Melbourne held 500 auctions in the week to 18 October, down 56% on the same week of 2025, Cotality reported. Cotality said the drop coincided with the new disclosure rules.

Buyers' agent Jo Sinistaj of National Property Buyers counted nearly a third of auction listings selling before auction day that first weekend. Some vendors, she wrote, "may have been nervous about their reserve being tested in public" (National Property Buyers). That matches the pattern before the law: in July, 58.1% of Melbourne homes listed for auction ended up as private sales, Domain data showed.

Falling prices drove much of that shift. Auctioneer Jeremy Fox of RT Edgar expects the law to push more sellers to expressions of interest too. Wherever the price stays private, the old temptation stays alive.

Victoria has banned underquoting for years, and its consumer watchdog says most agents try to follow the rules. Since 2022, its taskforce has issued more than 260 fines worth $3 million and received more than 8,800 complaints, Consumer Affairs Victoria said in July.

Those complaints are speeding up. The count stood near 3,900 in April 2025, so about 4,900 arrived in the 15 months to July 2026. That is roughly 330 a month, against about 125 a month before, on our maths.

Treat that as a rough gauge: more complaints can also mean more awareness, and about a third come from rival agents. In 2024, buyers' advocate Cate Bakos said she didn't think the fines were “all that punitive”.

New South Wales now charges up to $110,000, or three times the commission, under its 2026 law. Victoria's fines run to just over $48,000.

Consumer Affairs Minister Paul Edbrooke argues the law ends the wasted weekend. Victorians are “sick of wasting their weekends chasing homes” they would never get, he told the ABC on 16 October.

He has a point. Sinistaj saw big crowds, and every auction she attended sold above its reserve, though she called it a small sample. Sold prices must stay online for 18 months, which lets buyers test any quote against real results.

From the other side, REIV chief executive Toby Balazs told the ABC the law will lead to overquoting instead. Both cases share a blind spot: they judge the law on auctions, while more Melbourne homes now sell by negotiation.

The reserve is not binding, so a seller could publish a low reserve and still refuse offers above it. Three weeks of data also falls in a downturn, when underquoting pays least. The verdict rests on one assumption: that the side doors stay open once prices rise again.

Victoria's law will mostly end the fake bargain on auction listings, but underquoting will survive in pre-auction deals and private sales. Confidence: Likely. Auction buyers win a real number; private-sale buyers still rely on enforcement that hasn't yet scared the industry.

This piece draws on 18 sources: six official Victorian government pages, two peer-reviewed studies (Scotland and Ireland), six news reports with original interviews, and four industry or data pages. We could not find any official figure for how common underquoting is in Victoria, and no data yet on how published reserves compare with sale prices. Our maths: the change in complaint rates and the gap between reserves and guide midpoints. Updated on 3 November 2026 with the first auction data under the new law. Researched with AI tools; checked and edited by VOID.

Victoria now makes sellers post their real reserve price a week before an auction, so the cheap-looking ad that drags you to a house you can't afford mostly disappears. But a lot of homes now sell before auction day or privately, where that rule doesn't apply, and auction numbers halved in the law's first week. Complaints about underquoting kept rising even under the old fines, so the problem is more likely to move than to die.