What Victoria Has Done
The Victorian government has introduced a requirement that property vendors publish their reserve price seven days before auction. The stated purpose is transparency and reducing underquoting.
The instinct behind the policy is understandable. Underquoting is a genuine problem: agents advertising properties at prices far below what vendors will accept wastes buyer time and creates frustration. No reasonable person objects to fixing that.
The mechanism chosen to fix it is the problem.
Why This Hurts Vendors
A reserve price is not a number that stays fixed from the moment you set it. It is a number you arrive at by taking the campaign conditions into account.
In the final week before an auction, a great deal happens. Registered buyer numbers become known. Last-minute inspections either confirm or soften demand. Comparable sales from that week either support or challenge the price you had in mind. Conversations with serious buyers reveal whether their interest is genuine or tentative.
All of that information is relevant to where you set your reserve. A reserve set seven days before auction is set before most of that information exists. The government is asking vendors to make their single most important auction decision at the point when they have the least information.
If fifteen buyers registered and three have indicated serious intent, a vendor might reasonably set a higher reserve than they would have on day one of the campaign. If buyer interest came in softer than expected, they might set it lower. Neither adjustment is possible under this law.
What Victoria Already Has
The underquoting problem is not unsolvable without locking in reserves early. Victoria already requires agents to provide:
- Price ranges on all marketing materials
- Statements of information with comparable sales data
- Access to contract and sales result information
These tools exist to give buyers an accurate picture of where the property is likely to sell. If they are not working, the problem is enforcement, not the absence of a reserve-price publication requirement.
Stronger enforcement of existing underquoting rules, combined with meaningful penalties, would address the actual problem without the collateral damage to vendors.
What a Better Policy Would Look Like
Publish the reserve on the day of auction, not the week before. Buyers arriving on auction day would have the same transparency the government wants to provide, without the vendor losing the ability to respond to a week's worth of new information.
This is not a radical idea. It is the sensible middle ground between no disclosure and a seven-day pre-commitment that tilts the playing field away from the people whose asset is being sold.
A Note for South Australian Sellers
South Australia does not operate under the same rules. Vendors here retain the ability to make informed decisions about pricing and reserve setting throughout their campaign. That flexibility is worth protecting, and it is one of the reasons the South Australian auction process tends to produce results that both sides find reasonable.
For Victorian property owners navigating this new requirement, my condolences. The government thinks it knows the value of your property better than you do.
