Victoria’s New Underquoting Rules - How Transparency Laws May Reshape Pricing Behaviour

Under the changes, agents must publish the property’s reserve price at least seven days before auction or a fixed-date sale, follow much stricter rules when selecting comparable properties, and face penalties if they fail to comply. On paper, the aim is simple: make pricing more transparent and reduce the frustration buyers feel when a home sells far above its quoted range.

While the reforms are well-intentioned, the actual impact on the market may be quite different to what many expect. For one, publishing a reserve price introduces a new psychological anchor. Instead of guessing where a property may land, buyers will now begin their expectations at the publicly disclosed minimum, and vendors may be tempted to set that minimum higher in the first place. Once the reserve is visible, sellers may use it to allow room for negotiation or to test the depth of demand. Rather than calming prices, this could actually push the starting point up, especially in a competitive environment where buyers are already stretching to secure quality homes.

Another likely outcome is a shift away from auctions entirely. Auctions rely heavily on competitive tension and pricing strategy. If agents must reveal the reserve early, some may prefer private sales or expression-of-interest campaigns where transparency can be controlled, and price expectations are less rigid. Ironically, tightening the auction rules could drive more sales into formats that offer buyers less clarity, not more. EOIs, silent negotiations, and “price on request” approaches already exist across Melbourne’s prestige and outer suburban markets, and these new rules may accelerate their use.

Importantly, none of these reforms address the core issue underpinning Victoria’s property market: affordability. Underquoting frustrates buyers, but it’s not what drives prices. Whether reserves are published or not, the real forces remain unchanged, low supply, strong demand, population and migration growth, rising rents, tight vacancy rates, and limited construction activity. The market will ultimately pay what the market deems appropriate. Adjusting quoting rules won’t change the fact that quality homes in desirable suburbs attract fierce competition because there simply aren’t enough of them.

In the end, the crackdown on underquoting will improve aspects of the buyer experience, but it won’t necessarily soften the market. In some pockets, it may even add upward pressure. By forcing vendors to declare their expectations openly — and encouraging them to raise those expectations — these reforms could lift both the starting point and the momentum of bidding.

For buyers and sellers, the key is understanding that the fundamentals are not changing. Transparency is improving, but prices will still be driven by scarcity, demand, and competition. If anything, these reforms may simply shift how the market behaves, not where prices ultimately land.

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