Victoria Now Requires Auction Reserve Prices to Be Disclosed. Will It Stop Underquoting?
Updated: Oct 6
Updated 6 Oct 2026
For decades, Melbourne property buyers have been turning up to auctions without knowing one rather important number:
What is the Reserve Price? What is the price the seller is actually prepared to sell for.
A property might be advertised at $1.2 million to $1.3 million, attract several interested buyers, undergo weeks of inspections and building reports — only for buyers to discover on auction day that the seller's reserve was substantially higher.
Understandably, buyers have often asked:
Why don't they just disclose the reserve price?
Victoria has now changed the rules. Under the new property price transparency laws introduced from 1 October 2026, estate agents selling properties by auction or fixed-date sale must publish the seller's reserve price at least seven days before the sale.
The reserve disclosure requirement applies to auctions and fixed-date sales held from 16 October 2026 onwards.
That is a significant change to the way Victorian property has traditionally been sold.
But there is a more important question:
Will disclosing the reserve price actually stop underquoting?
My view?
It should improve transparency considerably. But no, it will not eliminate underquoting or stop agents from managing buyer expectations strategically.
The game has changed. But the need to do your due diligence hasn't disappeared.
What Is an Auction Reserve Price?
The auction reserve price is the minimum price at which the seller is willing to accept at the auction.
If bidding reaches or exceeds the reserve price, the property is usually “on the market” and will usually be sold to the highest bidder.
If bidding doesn’t reach the reserve, the property is typically “passed in” and negotiations happen afterwards with the highest bidder and other interested parties. Sometimes, the next higher bidder might also be asked to prepare for negotiations, in case the higher bidder could not reach an agreeable price.
Traditionally, Victorian buyers usually didn't know the Auction Reserve Price. It is also important to note that the reserve price used to be adjustable right up to the final minutes before the auction hammer falls.
You would see an advertised range such as:
$1,300,000–$1,400,000
But that did not necessarily mean the vendor would sell for $1.4 million. The previous "Statement of Information" was supposed to provide a price guide to what the vendor wants. But, as with any sales and marketing people would, they have been creatively adopted to attract buyers.
So, at auctions, the bidding might reach $1.45 million, way passed the top of the price guide and the auctioneer could still announce:
“We're not quite there yet.”
Only when the property was declared “on the market” would buyers know that the bidding had reached or exceeded the reserve.
That uncertainty was a very useful selling tool.
What Are the New 2026 Changes in Property Auctions in Victoria?
Under Victoria's new property price transparency rules, an estate agent conducting an auction or fixed-date sale must obtain and publish the seller's reserve price at least seven days before the sale.
The reserve must be disclosed as a single dollar amount.
Not:
“From $1.4 million”
“$1.4 million+”
“Offers over $1.4 million”
“Starting from $1.4 million”
But something much clearer:
Reserve: $1,400,000
The reserve must also appear in the property's advertising and Property Price Statement.
And the penalties for doing it differently have also been enhanced. If the reserve has not been publicly disclosed for the required seven-day period, the auction or fixed-date sale cannot proceed.
That is a significant change.
Why Were Auction Reserve Prices Traditionally Kept Secret?
To understand what may happen next, you first need to understand why agents and vendors liked keeping them secret.
It wasn't accidental.
1. Uncertainty creates competition
Imagine a property advertised at:
$1.30m–$1.40m
but the seller actually wants:
$1.50m.
A buyer whose maximum is $1.42m may spend several weeks:
attending inspections
reviewing contracts
arranging finance
paying for a building inspection
paying for contract reviews
researching comparable sales
emotionally committing to the property
turning up to auction.
Once that buyer is standing in the crowd and bidding has reached $1.4m, another $5,000 can suddenly feel insignificant. Then another $5,000. Then another.
That is how auctions work. The agent isn't merely selling a house. They are creating a competitive environment, encouraging bidders to out bid each other. It is designed to stroke the ego, face saving, nerves, fear of missing out, etc, so bidders think with their heart, not their brains.
2. Keeping the reserve secret kept more buyers interested
If buyers knew from day one that the reserve was $1.5m, anyone with a $1.4m ceiling could simply walk away.
That may be sensible for the buyer, but this means a smaller crowd, and it isn't necessarily useful for the seller.
More buyers at an auction can create:
more bidding
stronger competition
social proof
urgency
emotional involvement.
Even a bid from the buyer who ultimately has no chance of purchasing the property can help move bidding upwards.
3. It gave the seller an information advantage
The selling agent typically knows:
how many buyers have inspected
how many contracts have been requested
what offers have been made
which offers have been rejected
how interested individual buyers appear
the seller's expectations
the buyers' budget
A buyer usually knows substantially less. Keeping the reserve confidential maintained that information imbalance, which favoured the vendor.
Is Mandatory Auction Reserve Price Disclosure Good for Buyers?
Yes. And I think buyers should welcome it. The most obvious benefit is that buyers can stop wasting time, emotions and money on properties they realistically cannot afford.
Suppose the advertised campaign initially suggests:
$1.30m–$1.40m
and seven days before auction the reserve becomes:
$1.52m.
A buyer with a hard ceiling of $1.42m now knows something extremely valuable. They're not likely to get it. So,
Don't bother.
No emotional auction morning.
No unnecessary building inspection.
No Saturday wasted standing on someone's nature strip.
No convincing yourself that maybe the vendor will sell for less.
Move on.
That is genuine improvement.
But Don't Confuse the Reserve Price With Market Value
This is where I think many buyers will make their next mistake. They will see:
Reserve price: $1,500,000
and think the property must therefore be worth $1.5 million.
No. Wrong. The reserve price tells you what the seller is prepared to accept. It does not tell you what the property is worth. Those are two completely different things.
A seller can have a reserve of $1.5m on a property worth $1.4m. They can also have a reserve of $1.5m on a property that competitive bidding eventually pushes to $1.7m.
The reserve is a seller's price instruction.
Market value is much more complicated. It is determined by evidence and ultimately what competing buyers are prepared to pay.
That distinction becomes even more important under the new system.
Will Auction Reserve Price Disclosure Stop Underquoting?
Not completely. It closes one obvious transparency gap, but it doesn't remove the underlying incentives.
Selling agents still have a legal obligation to act for their vendor. Their job is still to generate as much competition as possible and obtain the strongest possible selling price.
So agents will adapt.
Here are some things I expect we will see.
1. More attention on the first three weeks of the campaign
The reserve only has to be disclosed seven days before the auction. A typical Melbourne auction campaign can run for several weeks. That means much of the marketing campaign may still occur before buyers know the seller's final reserve. The early advertised range therefore remains extremely important.
2. More aggressive pre-auction negotiations
If a vendor believes a buyer is prepared to make an exceptional offer before the reserve disclosure deadline, there remains every incentive to explore it. Good selling agents will continue testing buyers.
Expect questions such as:
“What would you pay to stop the auction?”
The reserve disclosure rule does not remove negotiation.
3. Vendors may simply set ambitious reserves
Mandatory disclosure does not require vendors to set a reasonable reserve. It is not illegal for the vendor to have unrealistic expectations.
For example:
Comparable market evidence: $1.40m–$1.48m
Vendor reserve: $1.58m
The disclosure has achieved transparency. It has not magically made the vendor realistic. The property may simply pass in.
4. The disclosed reserve may become the starting line
This may be the biggest behavioural change.
Previously, buyers often asked:
“What is the reserve?”
Under the new system they may already know it. But if five genuine buyers all know the reserve is $1.5m, the conversation simply changes to:
“How far above $1.5m will it go?”
A keen bidder who sees value at the stated reserve price, will simply start the bid at $1.5million. And if several buyers want the property, the reserve becomes largely irrelevant almost immediately. Competition still determines the result.
Could Auction Price Reserve Disclosure Increase Competition?
Sometimes, yes. Buyers should also understand the reverse could very much be true. It can actually increase competition.
Suppose a property initially appears likely to sell for $1.5m–$1.6m. A buyer with $1.55m might decide not to bother.
Then the disclosed reserve appears: $1,480,000.
Suddenly that buyer thinks: Hang on. I've got a chance.
So do several other buyers.
Instead of discouraging competition, reserve disclosure is likely to attract more serious bidders. Transparency simply means better information, it doesn't necessarily mean lower prices.
What About the Advertised Price in the Campaign?
This remains critically important.
Victoria's underquoting laws prohibit agents from advertising a property below certain prescribed pricing benchmarks, including the agent's estimated selling price and relevant seller expectations or rejected offers.
The new Property Price Statement has also replaced the old Statement of Information (SOI).
But buyers should still treat an advertised range as one piece of evidence. It is not a professional valuation and certainly not a promise of the eventual selling price.
A competitive auction can legitimately produce a result well above both the quoted range and reserve. A high auction result by itself is not proof of underquoting.
Sometimes two buyers simply want the same house very badly. I've attended hundreds of Melbourne auctions, and have seen this happen many times.
A $1.5 Million Reserve Does Not Mean You Should Only Pay $1.5 Million
You still need to do your preparations for the auction. A $1.5 Million Reserve Does Not Mean You Should Only Pay $1.5 Million. We have a whole guide on Auction Winning Strategies.
But in briefly, before attending an auction, a buyer should establish three completely separate numbers.
1. The vendor's reserve
What the seller wants.
2. Your assessment of market value
What comparable evidence suggests the property is worth.
3. Your maximum purchase price
What the property is worth to you, considering your finances, alternatives and circumstances.
Those numbers may be very different. For example:
Measure | Price |
Vendor reserve | $1,500,000 |
Your assessed market value | $1,460,000–$1,510,000 |
Your maximum price | $1,485,000 |
The fact the reserve is $1.5m doesn't mean you should suddenly find another $15,000. If your research tells you to walk away at $1.485m, walk away. The seller doesn't have to sell to you, and you don't have to buy from them.
What Buyers Should Do Under the New Victorian Auction Rules
Auction Reserve Price disclosure changes one part of auction strategy. It doesn't change the fundamentals.
You still need to do your due diligence. Analyse the property before analysing the auction.
Look at:
land size
building quality
renovation level
street quality
school zones
orientation
floorplan
location nuisances
development potential
comparable recent sales.
Then establish a defensible value range.
Should Buyers Protect Themselves in an Auction After Knowing the Reserve Price?
If you’re buying at auction in Melbourne (or anywhere in Australia), a few practical strategies help you fight back against the “mystery reserve” problem:
1. Ignore the Reserve Price Range. Do your Independent Homework.
Treat the advertised range as marketing, not the truth. Learn the Top 9 Tips to Win Auctions.
Look at recent comparable sales
Adjust for renovations, location, etc.
Build your own value range, then set your absolute walk-away number
If the property sells way beyond that, it was never yours in the first place.
The full process to manage auction is here.
2. Ask the Agent the Right Questions (and Read the Answers Properly)
Now that you know the reserve price, you can still ask:
“Has the vendor rejected anything so far?”
“If it passes in, what price do they want to see to sell today?”
Sales agents will not give you a clean number most of the time. It is their tactical advantage. But their reply, how they reply, often tell you a lot.
3. Decide Whether to Hid, and How
If the reserve price looks underquoted compared to reality:
You can still attend and bid, but go in with good discipline. Walkaway when you have to.
Avoid bidding just because “the crowd is moving” – that crowd isn’t paying your mortgage.
If you’re close but not quite in range:
Sometimes the smarter move is to let it pass in and see what happens in a private negotiation afterwards, particularly if bidding is weak.
4. Get a Professional in Your Corner
Property buying is always stacked against the Buyer. The Seller is supported with:
Listing agents
Auctioneers
Vendor’s advocates
Lawyers and conveyancers
While the only support on the buying side, is often only Google and nerves.
Do you homework diligently or employ a good buyers' advocate who will:
Appraise true value, not agent spin
Read the campaign strength and buyer expectations
Provide live guidance / strategy during auction, whether to push, negotiate prior, or walk away
Bid on your behalf, protecting your price and nerves, without getting emotional and revealing your limit
Negotiate strongly with the sales agent if the property passes in.
Don't be fixated to the reserve
This will become increasingly important. If the reserve is disclosed at $1.4m, don't subconsciously conclude:
“Okay, $1.4m must be fair.”
That is classic price anchoring.
Your valuation should ideally be established before the disclosed reserve influences you.
Has Victoria Finally Solved Underquoting?
No. But it has made an important change. Underquoting isn't caused by one single rule. Neither will it be completely solved by rule changes.
It comes from the interaction between:
vendor expectations
agent price estimates
marketing strategy
comparable-sale selection
buyer competition
changing market conditions
rejected offers
reserve prices.
Publishing the reserve removes one piece of uncertainty. It does not remove the auction from market forces. A new property rule change may affect the valuation, the reserve price and market reaction to auctions. Case in point.. the recent tax changes announced in Budget 2026.
An auction remains a competitive selling process designed primarily to achieve a good outcome for the seller. Buyers need to remember that.
My View as a Melbourne Buyer's Advocate
I support reserve price disclosure. I support it because better information allows buyers to make better decisions, not because I think it will suddenly make Melbourne auctions perfectly fair. It will not.
If the vendor wants $1.6m and my buyer client can only spend $1.45m, I'd rather know.
There is no benefit to my client spending money on due diligence, getting emotionally attached and attending an auction they had virtually no chance of winning.
But experienced buyers shouldn't become obsessed with the reserve price either.
When assessing properties for our clients, our question has never simply been: “What does the vendor want?” [We do ask this question, but the idea is to watch how the agent respond, rather than genuinely wanting to know the reserve]
The more important question is:
“What is this property actually worth, and at what price should our client walk away?” And the answer will not be from the sales agent.
That approach remains exactly the same under the new Victoria Auction laws.
The Biggest Change May Be Buyer Psychology
Previously, agents controlled the reserve price, which is one particularly important (but not valuable) piece of information.
From October 2026, Victorian buyers get to see that card before auction day. But knowing the dealer's card doesn't mean you automatically win the hand. The seller still has an experienced selling agent. The auctioneer still works for the vendor.
Other buyers still have their own budgets, and auction nerves always create emotions, and that can still turn an otherwise rational buyer into someone bidding another $20,000 because they refuse to lose.
So use the disclosed auction reserve price is just an added piece of information. It is not a valuation, not a permission to pay that amount. It certainly should not be your maximum bid.
Final Thoughts
Victoria's new reserve disclosure laws are good news for property buyers. They remove some unnecessary mystery from Melbourne auctions and should prevent buyers wasting time pursuing properties where vendor expectations are clearly beyond their budgets.
But do not make the mistake of thinking the new system tells you what a property is worth. The auction reserve price tells you what the seller wants, not what the property is worth, not what the property will sell at.
Your own circumstances tell you what you should pay. Those remain different sets of numbers.
And understanding the difference between them is far more valuable than simply knowing the reserve.
How Can Buyers Protect Themselves in an Auction, Without Knowing the Reserve Price?
If you’re buying at auction in Melbourne (or anywhere in Australia), a few practical strategies help you fight back against the “mystery reserve” problem:
1. Ignore the Quoted Price Range. Do your Independent Homework.
Treat the advertised range as marketing, not the truth. Learn the Top 9 Tips to Win Auctions.
Look at recent comparable sales
Adjust for renovations, location, etc.
Build your own value range, then set your absolute walk-away number
If the property sells way beyond that, it was never yours in the first place.
The full process to manage auction is here.
2. Ask the Agent the Right Questions (and Read the Answers Properly)
You won’t get the reserve, but you can read between the lines, you can still ask:
“What level would definitely buy it prior?”
“Has the vendor rejected anything so far?”
“If it passes in, what price do they want to see to sell today?”
Sales agents will not give you a clean number most of the time. It is their tactical advantage. But their reply, how they reply, often tell you a lot.
3. Decide Whether to Hid, and How
If the property looks underquoted compared to reality:
You can still attend and bid, but go in with good discipline. Walkaway when you have to.
Avoid bidding just because “the crowd is moving” – that crowd isn’t paying your mortgage.
If you’re close but not quite in range:
Sometimes the smarter move is to let it pass in and see what happens in a private negotiation afterwards, particularly if bidding is weak.
4. Get a Professional in Your Corner
Property buying is always stacked against the Buyer. The Seller is supported with:
Listing agents
Auctioneers
Vendor’s advocates
Lawyers and conveyancers
While the only support on the buying side, is often only Google and nerves.
Do you homework diligently or employ a good buyers advocate who will:
Analyse true value, not agent spin
Read the campaign strength and likely vendor expectations
Provide live guidance/strategy during auction, whether to push, negotiate prior, or walk away
Bid on your behalf, protecting your price and nerves, without getting emotional and revealing your limit
Negotiate strongly with the sales agent if the property passes in.
The Case for Getting Assistance from Buyers Advocates. And it is Not Expensive.
In Australia and Melbourne, the property buying system is designed heavily in favour of the seller, having someone on your side who plays this game every week isn’t a luxury. It is a risk management necessity. The Buyers Advocates levels the playing field and moves the odds to your favour.
If you find yourself struggling with property auctions in Melbourne, do get in touch. Our Auction Bidding and Negotiation service is a cost effective way to maintain disciplined auction bidding, stay focused, bid confidently at auctions, and protect your budget and lessen your stress during auctions.
Frequently Asked Questions
Does Victoria now require auction reserve prices to be disclosed?
Yes. Under Victoria's new property price transparency rules, reserve prices must be published at least seven days before auctions and fixed-date sales covered by the new requirements.
The reserve disclosure requirement applies to auctions and fixed-date sales held from 16 October 2026 onwards.
When does the agent have to disclose the auction reserve price?
At least seven days before the auction or fixed-date sale.
Can the agent advertise “$1.5 million+” as the reserve?
No. The published reserve must be stated as a single dollar amount, without qualifiers such as “from”, “over”, “+” or “starting at”.
Can an auction proceed if the reserve wasn't disclosed seven days earlier?
Under the new Victorian requirements, the auction or fixed-date sale cannot proceed unless the reserve has been published for the required seven-day period.
Is the reserve price the same as market value?
No. The reserve represents the seller's minimum authorised selling price. Market value is what the buyers are willing to pay.
Is the reserve price the same as price appraisal?
No. A valuation should be assessed independently using comparable sales and other property-specific evidence.
Does a property selling above reserve prove it was underquoted?
No. Competitive bidding can and do often legitimately push a property substantially above its reserve or advertised range. The sale result alone does not establish underquoting.
Should I bid up to the disclosed reserve?
Not automatically. Establish the property's value and your own maximum price independently. If your maximum is below the seller's reserve, walking away may be the correct decision.
How do I know when bidding has reached the reserve price?
Listen for the auctioneer saying something like:
“Ladies and gentlemen, we’re now on the market and selling.”
That statement means bidding has reached or passed the reserve and, barring anything unusual, the property will be sold to the highest bidder. If you don’t hear those words, the property may still be below reserve and could be passed in.
What should I do if I think a property is underquoted?
Focus on your own price assessment, not the quote.
Check multiple comparable sales (same suburb, similar land size, condition, and location quality).
Work out what you think is fair value and your absolute maximum.
If the campaign looks obviously underquoted, assume competition will push the price closer to its true market value.
If you’re consistently seeing properties sell way beyond where you expect, it may be time to reassess your budget or brief, or get professional help.
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