26 Nov
The Victorian Government’s proposal to force vendors to publish their reserve price a full week before an auction has been celebrated as a win for buyer transparency. The State Government clearly feels it is taking strong action in an area that attracts intense public frustration.
But when you look beyond the headline, the flaws are obvious. This legislation is not the answer. In fact, it misunderstands how a free market works, how vendors make decisions, and how real estate campaigns actually unfold.
Real estate is a free market. Vendors have the right to achieve the best possible price for their home and to adjust their expectations based on buyer interest, market feedback, and personal circumstances.
Locking in a reserve price seven days before auction interferes with that natural process. It removes flexibility at the very moment when genuine market signals are emerging, forcing vendors to commit to a number before they are ready – even though they are selling the most significant financial asset they will ever own.
Why this policy misses the mark
The reality is reserve prices are not static. They move with the campaign, shaped by the number of buyers inspecting, the level of inquiry, feedback from prospective bidders, and changes in the seller’s situation. Asking vendors to set this number a week out may be administratively convenient for government, but it is entirely disconnected from how real estate decisions are made.
Consultation with industry groups took place during the development of this policy. The question is not whether input was sought, but whether it was taken seriously. Counter-arguments highlighting the need for vendor flexibility, the dynamic nature of pricing, and the importance of building campaign momentum were raised. But the final announcement suggests this feedback had limited weight. When policy does not reflect the lived reality of those operating within it, unintended consequences are inevitable.
The tools to identify underquoting already exist: price ranges, statements of information, comparable sales, contracts, and final sale results give regulators everything they need to assess whether pricing is reasonable or whether patterns of behaviour exist.
For agents, real-time market insights are now more critical than ever. Tools like REIP Nexus allow us to guide vendors confidently, providing up-to-the-minute data on comparable sales, buyer interest, and market trends – helping to educate sellers and remove the stress that rigid early reserve rules create.
A better path forward
In a free market, we do not need rules that interfere with a vendor’s right to negotiate the best possible price. Regulators can leverage existing data and technology rather than relying on inspectors at auctions to monitor behaviour in real time.
Perhaps a sensible middle ground exists, like disclosing a reserve price on auction day, when circumstances are no longer shifting. Buyers would still receive clarity, vendors would retain the flexibility they need, and the auction process would continue to function as intended.
Victoria deserves a solution to underquoting grounded in real behaviour. This legislation may be well intentioned, but it does not reflect how the market works, how sellers make decisions, or how transparency is best delivered. With the right tools and insights at our disposal, agents can remove much of the friction this policy creates and ensure vendors make informed, confident decisions.
Until next time,
Stay connected.
Sadhana Smiles
CEO, Real Estate Industry Partners
Your industry-backed and owned CMA and market insights tool helping you drive your real estate business with your data
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