The proposed auction reserve price Victoria reforms have raised serious concerns for vendors, agents and anyone considering selling by auction or fixed-date sale.
Auction Reserve Price Victoria: Why the Proposed Laws Misunderstand Selling Campaigns
The reserve price is one of the most important decisions a vendor will make during a property campaign, whether the property is being sold by auction, Expressions of Interest or another fixed-date sale process.
In Victoria, the current system requires the reserve price to be decided before the auction. The auctioneer must know the vendor’s reserve before bidding begins, because that reserve determines whether the property can be declared on the market and sold under the hammer. That system has worked for generations because it allows the vendor to make a final, informed decision after the market has had time to respond.
The Victorian Government’s proposed changes would alter that process significantly. Consumer Legislation Amendment Bill 2026
If passed in their current form, the proposed amendments would require the seller’s reserve price to be confirmed in writing, expressed as a single dollar amount, and published for at least seven days before an auction or fixed-date sale. The auction or fixed-date sale could not proceed unless that reserve price had been published for the full seven-day period. The Bill also provides that these amendments are proposed to commence on 1 October 2026.
The stated intention may be to improve transparency and address underquoting, but from a vendor’s perspective, the practical consequences may be very different. The problem with the proposed reform is that it appears to misunderstand the real function of auction and fixed-date selling campaigns.
An auction or fixed-date sale is not simply a public price event. It is a decision-making process. It creates urgency, competition and clarity. Buyers often make decisions late. Vendors often gain confidence late. The market often reveals itself in the final days, not neatly one week before the closing date.
If you are concerned about the impact of these proposed changes, now is the time to make your views known to your local Members of Parliament before the reserve price disclosure requirement becomes law.
That is why forcing a vendor to disclose their reserve price seven days before an auction or fixed-date sale risks weakening the very process the legislation is trying to regulate.
What Is an Auction Reserve Price in Victoria?
An auction reserve price is the minimum price a vendor is prepared to accept at auction. It is not the advertised price. It is not a valuation. It is not a guarantee that a property will sell. It is the vendor’s instruction to the auctioneer about the price at which the property may be sold.
If bidding reaches or exceeds the reserve, the property can be declared on the market. If bidding does not reach the reserve, the property may be passed in and negotiations can continue afterwards.
That reserve decision is a major financial and emotional decision for many sellers. For some vendors, the home may represent decades of ownership. For others, it may be part of an estate, a family transition, a downsizing decision, an investment portfolio or a significant capital event.
It should not be rushed.
How Is the Auction Reserve Price Currently Set?
In a well-managed auction campaign, the reserve price is usually considered after the vendor has had time to assess the market. That means reviewing buyer enquiry, inspection numbers, second inspections, contract requests, comparable sales, competing properties, agent feedback and the level of genuine buyer interest.
A typical Melbourne auction campaign often runs for around three weeks, generally covering four weekends of open for inspections. That matters.
The first week often tells you who is curious. The second week starts to show who is serious. The final week often reveals who is prepared to act. Compressing that decision too early risks asking vendors to make a major call before the market has fully revealed itself.
What Would the Proposed Reserve Price Law Require?
The Victorian Government has introduced amendments to the Estate Agents Act 1980 that would change how reserve prices are handled before auction and fixed-date sales.
If passed in their current form, the proposed amendments would require the estate agent or agent’s representative to request the seller’s reserve price in writing before the auction or fixed-date sale. That written request must include the agent’s proposed reserve price, the reasons for that proposed reserve price, and a statement that the seller’s reserve price must be expressed as a single dollar amount without additional words or symbols.
The seller may accept the proposed reserve with signed confirmation, reject it and specify another reserve price, or request another proposed reserve price from the agent. Any reserve price specified in the request or response must be a single dollar amount and must not be modified by words or symbols such as “from”, “over”, “starting at” or “+”.
Once confirmed, the seller’s reserve price would need to be published for at least seven days before the auction or fixed-date sale. The proposed section 47AI goes further, stating that an agent or agent’s representative must not conduct an auction or fixed-date sale if the seller’s reserve price has not been published for the full seven days immediately beforehand.
In theory, this is intended to create greater transparency for buyers. In practice, it may weaken the vendor’s negotiating position and interfere with the natural process of market discovery.
That is where the practical problem becomes serious. This does not simply ask the vendor to think about price earlier. It forces a written, single-number reserve into the public domain before the campaign may have fully matured. In a live auction campaign, that timing matters. Buyers often act late. Building inspections, contract reviews, second inspections and price feedback frequently crystallise in the final days.
A rule that assumes the market has spoken seven days before auction or a fixed-date sale misunderstands how property campaigns actually work.
This is important because the proposed obligation is not limited to traditional public auctions. It also applies to fixed-date sale campaigns, which may include Expressions of Interest, sale by set date or similar deadline-driven methods where buyers are asked to submit offers by a nominated closing date.
Why Seven Day Reserve Disclosure Is a Problem for Sellers
The Key Problem is Timing.
Most vendors are not professional sellers. They do not sell property every year. They need guidance, evidence and time to understand what the market is telling them.
Some vendors start with realistic expectations. Some are ahead of the market. Some are behind it. Some need to see feedback over multiple inspections before they accept where value sits. That is not a flaw in the system. That is the system working.
A good campaign educates the vendor. It helps them move from opinion to evidence. The proposed reserve disclosure requirement risks forcing that decision before enough evidence has been gathered. It also publicly discloses the vendor’s minimum position.
That may place a cap in the minds of buyers. It may reduce competitive tension. It may change bidder behaviour. It may also make negotiations more difficult if buyers treat the disclosed reserve as the final price, rather than the minimum price at which the vendor may be prepared to sell.
Fixed-Date Campaigns Work Because They Create Decision Pressure
One of the most important features of auction and fixed-date sale campaigns is that they create impetus. They give buyers a clear choice: make a decision or risk missing out. That pressure is not a flaw in the process. It is one of the reasons these methods work.
Buyers often make decisions late. Vendors also make decisions late, because they are responding to live market feedback. That is the commercial reality of an auction campaign.
A recent campaign we managed is a good example. We extended the campaign to five weekends instead of the usual four because the market was in a state of flux. Federal budget proposals, investor concern and media commentary were creating uncertainty. People can handle bad news, but they find uncertainty much harder to process.
In that environment, buyers took longer to engage. They watched, assessed, hesitated and then acted. The eventual purchaser inspected the property on the Wednesday before the auction. They provided price feedback on the Friday before the auction and arranged a building inspection before auction day. That was critical information.
But under the proposed reserve disclosure model, the vendor may have already been required to disclose their reserve before that buyer had even entered the process properly. That highlights the problem. The proposed legislation does not appear to recognise how auction campaigns actually function. Buyer decisions often crystallise late. Vendor confidence often builds late. Competition often becomes clear late. This is not theory. This is how the auction market works in practice.
To require a vendor to disclose their reserve price seven days before auction risks forcing them to make a final position known before the market has finished speaking.
That is counterintuitive to the auction process. The reserve should be informed by the campaign, not prematurely imposed on it.
For vendors, the right auction strategy in Melbourne will become even more important if these changes proceed.
Why Vendors Need Time to Understand the Market
Selling Property is not Just a Legal Process. It is a Human Process.
Vendors need time to absorb feedback. They need time to understand the difference between asking price, market value and competitive buyer behaviour. They also need experienced advice.
There are times when a vendor’s expectations are too high. There are times when buyer feedback is stronger than expected. There are times when a campaign builds late momentum. There are also times when the market is quieter than anticipated and the strategy needs to be adjusted. That is why the reserve price should be set carefully, not prematurely.
The current system allows the reserve to be informed by the campaign. The proposed change risks forcing the campaign to be shaped around a reserve set too early.
Could This Change Push Sellers Away From Auctions?
That is a Real Possibility.
If vendors feel they are being forced to reveal their minimum position too early, some may choose other methods of sale. That could mean more private sale campaigns, more expressions of interest, more off-market negotiations and less open competition.
Ironically, that may lead to less transparency, not more. Auction works because buyers can see the competition. They can decide whether to continue bidding. Vendors can see the market in real time. The process is public, competitive and immediate.
If this reform discourages vendors from using auction, the market may become less open, not more.
Property Owners Should Make Their Views Known
The Bill has been introduced in the Legislative Assembly and is currently progressing through Parliament.
Because these changes are still before Parliament, property owners, vendors and industry participants should take the opportunity to make their views known before the proposed reserve price disclosure requirement becomes law.
In our view, the proposed reserve price disclosure requirement should not proceed in its current form. It risks weakening the vendor’s position, interfering with the auction process and creating more uncertainty, not less.
If you are concerned about the impact of these proposed changes, consider writing to your local Members of Parliament.
Asking them to oppose the reserve price disclosure measure, or at the very least, to support further consultation with vendors, agents, auctioneers and property owners before any final decision is made.
What Should Vendors Do Before Selling?
If these reforms proceed despite industry and vendor concerns, preparation will become even more important.
Vendors will need to consider price strategy earlier, campaign structure more carefully and method of sale with greater precision. For anyone selling property in Melbourne’s Inner East, the reserve price should be part of a broader campaign strategy, not a rushed number chosen in isolation.
The reserve price should not be treated as a number chosen in isolation. It should be connected to the broader selling strategy.
That includes:
• The quality of comparable sales evidence
• Buyer feedback during the campaign
• The strength of competing properties
• The level of genuine buyer engagement
• The timing of the campaign
• Whether auction remains the right method of sale
• How best to protect the vendor’s negotiating position
This is where experienced advice matters. The solution is not panic. The solution is preparation.
Get Clear Advice Before You Set Your Reserve
At Clements International, we believe vendors need clear advice before they go to market. The proposed auction reserve price changes may create more complexity for sellers, but the fundamentals remain the same.
You need to understand value. You need to understand buyer behaviour. You need to understand your options. Most importantly, you need a strategy that protects your position.
If you are considering selling and want to understand how the proposed reserve price disclosure laws may affect your property, request a property appraisal with Clements International. We can provide clear advice on value, timing, method of sale and how to manage your campaign with confidence. To discuss your options before going to market, speak with Clements International.
Request your property appraisal today and make an informed decision before you go to market.