New sale laws fears

Victorian homebuyers are being warned they could be slugged with higher prices under a controversial crackdown on auctions.

And the changes could come amid the spring sales surge, with the state government yet to confirm a launch date beyond being in force by the November election.

The government is preparing to introduce Australian-first laws requiring reserve prices to be published at least seven days before an auction or fixed-date sale.

It also plans to force sold prices to be disclosed once a sale becomes unconditional. Sellers would also have to organise and pay for building and pest inspections under legislation to be introduced in 2027, if Labor wins the November state election.

Industry Insider Property Advocates director and vendors advocate Andrew Date said buyers might think reserve disclosure would help them, but it could have the opposite effect.

“Buyers will think that it’s good for them, but the reality is reserve prices might just be set a lot higher than what they would have been in the past,” Mr Date said. “Therefore, they might have to pay more.”

He said that the reserve rule risked making Victoria’s auction system messier and less flexible.

“I’ve got no idea how it’s going to work.”

He said Melbourne had long been the “auction capital of the world”, but fewer sellers may choose to sell publicly if the rules became too restrictive.

“You’re changing the fundamentals of how people have been buying and selling.”

Instead, he said that more sellers could shift to private sales or off-market deals to avoid being locked into an early reserve.

Mr Date said forced sold price disclosure would be less disruptive than reserve disclosure, but would still affect prestige sellers who want privacy, as well as agents who used undisclosed results to generate calls from buyers and potential sellers.

Matthews Real Estate director and auctioneer John Matthews said the reforms would increase accountability, but would also strip sellers of flexibility late in a campaign.

“You’re going to go to an auction knowing what the reserve is,” Mr Matthews said.

“But if there are multiple buyers prepared to pay it, it can still go higher.”

Meanwhile, those who set a reserve too high would risk losing interest in the critical final days of their campaign.

Mr Matthews said agents could start withdrawing or postponing more auctions if buyer interest was weak before a reserve was disclosed.

“There’s already a little bit of that creeping through,” he said. “I have noticed auctions, particularly from competitors, being withdrawn and not even going ahead on the day.”

Consumer Affairs Minister Paul Edbrooke said the reforms were needed to protect Victorians and families from underquoting.

“Underquoting isn’t fair and it’s young Victorians and families paying the price,” Mr Edbrooke said.

“That’s why we’re stamping it out by requiring reserve prices to be published at least seven days before an auction.”

“We’re also making buying a home fairer and easier by requiring the sold prices of homes to be disclosed, and saving homebuyers thousands on costly building and pest inspections.”

Opposition spokesman Tim McCurdy said Labor’s auction changes would make it harder to sell by auction.

“The Victorian Labor government’s new rules for auctions is making it harder to sell a property by auction,” Mr McCurdy said.

“The crackdown has gone too far and increased the risk of homes passing in.”

Mr McCurdy added that the opposition would review the reforms, if elected, warning Victoria’s auction system could “die in the long term” if a better balance between buyer protections and vendor flexibility was not achieved.

Rule change not top priority

Michael and Jackie Piccolo are taking their Niddrie family home to auction ahead of the wave of changes that could reshape how sellers set their expectations.

But the couple, who are selling 40 Shaw St, said after five years of thinking about changing their home, government rule changes weren’t their top priority.

Mr Piccolo said the family’s next move was about space, with the couple trading the luxury of their modern townhouse for an older home on more land.

Ms Piccolo said setting a price or reserve was still something that depended on campaign feedback.

“If we find there’s not much interest, we’ll have to reassess, and same goes if there’s lots of interest,” she said.

At the moment the four-bedroom, two-bathroom home has a $1.4m–$1.54m guide.

The home goes to auction at noon, May 9.