The Auction Game is Changing
In November 2025, the Victorian Government announced reforms that will fundamentally reshape how property auctions work across the state.
Starting mid-2026, vendors will be legally required to publish their reserve price seven days before auction and once it’s published, they can’t change it. This marks the end of the “blind auction” era that’s defined Victorian property sales for over a century.
So, What’s Actually Changing?
The core of the reform is straightforward but radical: the Seven-Day Rule. Under the new legislation expected to pass Parliament in May 2026,
This reserve must appear on every marketing channel. That includes online listings, street boards, brochures, the lot.
But here’s the kicker: once that reserve is published, no changes are permitted. The vendor loses their traditional right to adjust the reserve on auction day based on crowd size or bidding momentum. It’s locked in, creating what’s essentially an irrevocable minimum price the vendor must accept if bidding reaches that figure.
This applies to both traditional street auctions and “fixed-date sales” (those Expressions of Interest or Best and Final Offer campaigns), closing the loophole that might have let agents dodge the rules by switching formats.
The Enforcement Hammer
The Victorian Underquoting Taskforce, originally temporary, is now permanent and already armed with a track record. Over 200 infringements totaling $2.3 million in fines have occurred, before these new laws even take effect.
Penalties for breaches are severe:
- Auction bans: Fail to publish the reserve on time, and the auction becomes illegal. You can’t proceed.
- Financial penalties: Up to $11,000 per breach for individual agents, with potential cumulative fines reaching $38,000 for a single non-compliant campaign.
- Commission forfeiture: The nuclear option. Agents may be forced to forfeit their entire commission for non-compliance, potentially a $20,000-$50,000 loss.
What This Means for You as a Buyer
The economic implications are profound. RMIT economist Dr. Peyman Khezr warns that just because a reserve is $800,000 doesn’t mean the property won’t sell for $1.2 million in a competitive auction. Buyers expecting to pay near the reserve may still face disappointment.
More importantly, because vendors can’t lower the reserve after Day -7, they’re likely to set “defensive” reserves—artificially high figures to protect against selling too cheaply. This could lead to:
- Higher pass-in rates as properties fail to meet inflated reserves
- “Legalised underquoting” where agents set reserves at the absolute minimum to attract buyers, with properties still selling well above that figure
- More off-market sales as vendors avoid the rigidity of the system entirely
The Real Estate Institute of Victoria has been vocally opposed, arguing the reforms strip vendors of fundamental negotiation leverage and may prove “unworkable.”
How the New Auction Timeline Works
The traditional four-week auction campaign now has a critical “Hard Stop” at Week 3 (Day -7):
Weeks 1-3: Market Discovery Phase
- Property marketed with the standard Indicative Selling Price range
- Selling agent gathers buyer feedback and comparable sales data
Day -7: The Point of No Return
- Vendor must formally sign off on the reserve price
- All marketing materials must be updated immediately
- The Statement of Information must be revised to reflect the new reserve
Week 4: The Transparency Window
- Property now marketed at the fixed reserve price
- Buyers recalibrate. Those priced out drop off, new buyers with appropriate budgets may engage
- Auction proceeds with the reserve as public knowledge
How We’ll Adapt Our Strategy for You
These changes fundamentally shift how we at Lux Buyers Agents will approach property purchases on your behalf:
- Smarter Timing on Due Diligence Costs We’ll now wait until after the reserve is published on Day -7 before recommending you spend money on building and pest inspections. If the reserve comes in unrealistically high, we’ve saved you $500-$1,000 on a property that was never within reach.
- Reading Between the Lines Not all published reserves are created equal. We’ll help you understand:
- The “Stretch” Reserve: Set at the top of comparable sales, signaling a defensive vendor who’s risk-averse. These often pass in, creating post-auction negotiation opportunities.
- The “Bait” Reserve: Set artificially low despite strong interest, meaning the final price will likely be significantly higher. We’ll manage your expectations accordingly.
- Stronger Finance Positioning With the reserve known seven days out, we can immediately provide it to your broker for pre-approval or bank valuation at that specific figure. You’ll bid with greater confidence knowing your financing is solid at the minimum price.
What to Watch For
Expect the industry to adapt (and resist) in creative ways:
- Boardroom auctions conducted privately on short notice to avoid the seven-day trigger
- Flexible Expressions of Interest campaigns with no fixed closing date to claim exemption from the rules
- More off-market opportunities where vendors avoid the rules entirely by never publicly listing
This is where having our team at Lux Buyers Agents on your side becomes even more valuable. Navigating these evolving tactics while protecting your interests in an increasingly complex market is what we’re here to help with.
So, What’s Next?
The 2026 reforms create a more transparent but significantly more rigid market. “Week 4” becomes “Truth Week.” This will be the critical window when properties reveal their true minimum price, allowing you to make more informed decisions about where to invest your time and money.
While the Real Estate Institute of Victoria lobbies to water down the legislation before its May 2026 parliamentary introduction, the direction is clear: blind auctions in Victoria are ending. Success in this new era depends on understanding vendor psychology through their published reserves and protecting yourself from both defensive pricing and legalized bait tactics.
The auction game isn’t disappearing, it’s just revealing its cards seven days earlier. With our professional auction guidance, this transparency can work strongly in your favour. Contact us today to get your free consultation.
