Underquoting crackdown puts reserves on display

The Victorian government will introduce new laws this year to tighten rules around underquoting, requiring real estate agents to publish reserve prices at least a week before auction day.

The reforms are intended to stop properties being advertised below sellers’ expectations, only for reserve prices – the minimum amount a seller will accept for a property – to be lifted shortly before bidding begins.

Underquoting occurs when a property is deliberately advertised below its estimated selling price, or the owner’s asking price. Despite being illegal in Australia, the practice remains a significant issue.

An underquoting taskforce was set up in 2022 and has since received more than 5,000 complaints.

Under the proposed changes, real estate agents will need to disclose the reserve price seven days before a property goes under the hammer.

If the reserve is not disclosed within the required timeframe, the auction or fixed-date sale will not be able to go ahead.

Consumer Affairs Minister Nick Staikos said the changes are aimed at improving transparency for buyers.

“Underquoting isn’t fair and it’s young Victorians and families paying the price,” he said. “That’s why we’re stamping it out by requiring reserve prices to be published at least seven days before an auction.

“We want the housing market to be fair – that’s why we’re continuing to crack down on underquoting with strong laws, a dedicated taskforce and active enforcement.”

The state taskforce monitoring underquoting has issued more than 200 infringements totalling more than $2.3 million in fines.

Suspected instances of underquoting can be reported to Consumer Affairs Victoria at consumer.vic.gov.au/underquoting