Victoria loses auction crown to NSW under new reserve disclosure laws

Melbourne is about to lose something it has held for years: the title of Australia's auction capital. The shift arrives not with fanfare but with paperwork—a new state law that requires Victorian sellers to reveal their reserve price a full week before any auction or set-date sale goes public.

When the legislation takes effect on October 1, the change will be immediate and measurable. In the first full week of operation, from October 5 to October 11, Victoria is forecast to hold 707 auctions across the state. Sydney, by contrast, will conduct 841 auctions that same week. Melbourne itself will host 686 auctions; Sydney will host 718. The numbers are stark. For the first time in recent memory, New South Wales will outpace Victoria in weekly auction volume—a reversal that industry figures say signals something deeper than a temporary dip.

The new law emerged from Premier Ben Carroll's government with good intentions. Transparency in property sales is a reasonable goal. But the execution has created a tangle of complications that sellers, buyers, and agents are only now beginning to navigate. The requirement to disclose reserves seven days in advance means that if a seller receives an offer before auction and wants to adjust their reserve upward, they must reset the seven-day clock. That pushes the auction back another week. If an offer comes in and the seller declines it but raises the reserve anyway, the seller faces a choice: wait another seven days or proceed with the original timeline. It is, as one buyer's agent put it, "quite complicated."

Toby Balazs, chief executive of the Real Estate Institute of Victoria, acknowledged the intent was sound but criticized the rollout. "While the intent of the legislation is good, the execution of the new laws make it difficult and potentially more opaque, around what the actual price at which the property would be called on the market," he said. He pointed to the timing as particularly problematic—the law arrives as cost-of-living pressures mount and interest rate rises loom. The REIV expects subdued auction numbers throughout spring in Melbourne and surrounding areas. The institute has begun rolling out training sessions to help agents understand the new requirements, but the confusion is real.

Zac Jacobs, Victorian business director for Cohen Handler, a buyer's agency, observed that some sellers are responding by setting high reserves, while others are setting lower ones based on offers already received. The result is unpredictability. "The next three months would involve a lot of flux," he said. He also predicted a surge in pre-auction sales—homes sold before they ever reach the auction block, which removes them from the weekly tallies and further erodes Melbourne's auction dominance.

The decline in auction numbers is already visible in bidding patterns. Jacobs noted that auctions that do proceed are attracting fewer participants. "We used to see three, four, five bidders in our auctions, and now we're like, you see one, maybe two," he said. That thinning of competition has real consequences for sellers and, arguably, for price discovery itself.

Not everyone views the drop as purely negative. Matthew Scafidi, Victorian representative for the Real Estate Buyers Agents Association of Australia, suggested that some of the auctions being cancelled are ones that should never have gone to auction in the first place—sales where agents were using the auction method to force sellers to confront market reality rather than having a difficult conversation about overpricing. Under the new regime, those marginal auctions will disappear. "The ones that won't go to auction will be the ones where the vendor wants more than the home is worth," Scafidi said. He predicted that while auction numbers will drop, the quality of auctions that remain could improve, potentially giving Victoria a stronger market than Sydney once the initial disruption settles.

But there is a cost to buyers in all of this. Auctions, whatever their flaws, offer a transparent price-discovery mechanism that ordinary people can understand and participate in. Private sales, which are expected to increase as auctions decline, carry higher risk of overpricing. Scafidi warned that buyers pursuing homes through private sale would need to be "very careful about understanding market value" to avoid overpaying. The new law, intended to increase transparency, may instead push more transactions into a less transparent channel—a paradox that will likely define Victoria's property market for months to come.