February Tip of the Month

Proposed Auction Rule Changes in Victoria — What They Really Mean for Buyers

There’s been plenty of discussion lately around proposed changes to auction rules in Victoria, particularly laws aimed at increasing transparency by requiring reserve prices to be disclosed ahead of auction day.

On the surface, that sounds like a win for buyers and in some cases, it will be. But as with most things in property, the reality on the ground is a little more complex.

What’s Being Proposed?

Under the proposed changes, vendors would be required to publish their reserve price at least seven days prior to auction. The intention is clear: reduce underquoting and give buyers more certainty around pricing before they commit time, money, and energy to a campaign.

In theory, buyers would know the seller’s minimum acceptable price well before auction day, removing some of the guesswork that has long frustrated buyers.

Why This Won’t Eliminate Underquoting

While increased transparency is welcome, it’s important to understand that publishing a reserve price does not automatically equal fair pricing.

In markets where quality properties are in short supply, which is very much the case right now and we’re already seeing strong buyer competition push prices well beyond expectations. In these situations:

• A reserve may still be set deliberately low to attract maximum interest
• The low reserve helps create momentum, urgency, and competition
• On auction day, competitive bidding can quickly drive the price well past the reserve and any advertised expectations

So while the reserve may technically be “known”, buyers can still be blown out of the water if they rely on that figure alone. In other words, this change does not protect buyers from underquoting in strong, competitive markets as it simply shifts where the ambiguity sits.

How Buyer Strategy Needs to Adapt

The biggest risk for buyers is assuming that a published reserve equals fair value or a realistic buying price. It doesn’t.

Now more than ever, buyers need to:

• Look beyond the reserve and understand true market value
• Analyse comparable sales, not just asking prices
• Factor in depth of buyer demand, not just vendor expectations
• Be prepared for emotional bidding when stock is scarce

In high-demand pockets, especially for family homes and investment-grade properties, the market, not the reserve ultimately sets the price.

What This Means in Practice

The proposed changes may:

• Reduce some wasted inspections at the lower end of the market
• Give buyers an earlier indication of vendor intent
• Encourage some sellers to avoid auctions altogether

But they will not remove the need for proper research, pricing discipline, or strategy, particularly when competition is fierce.

The Takeaway for Buyers

Whether or not these auction changes are introduced, one thing remains constant:

The only real protection against underquoting is understanding where fair value truly sits before auction day.

That means doing your own research, interpreting comparable sales correctly, and having a clear strategy for how far you’re prepared to go.

Or, if you want clarity and confidence, talk to us at Buyers Advocate. Our role is to cut through the noise, assess real value, and ensure you’re making informed decisions not emotional ones in what is still a highly competitive auction environment.