- 2 mins
Have We Misunderstood the Long-Term Impact of Reserve Price Disclosure?
The proposed reserve price disclosure reforms have generated plenty of debate across Victoria's property industry.
I've spoken with many agents who have genuine concerns about reduced flexibility and negotiating strategy. They're valid concerns.
But regardless of where you stand on the reforms, I think there's one question we haven't fully explored.
Have we overlooked how they might change buyer behaviour?
Today we're judging these reforms in a softer market, where demand, not transparency is the limiting factor. The real test will come when buyer confidence and competition return.
Having called countless auctions during my career as an Auctioneer and Sales agent, one pattern became impossible to ignore.
The highest prices weren't always achieved with the highest reserves. They were often achieved with the most realistic reserves.
When a property was declared "on the market", the atmosphere changed almost immediately. Buyers knew the property was selling, uncertainty disappeared, urgency increased and every bid suddenly mattered.
In my experience, certainty often created stronger competition than uncertainty ever did.
That's why I wonder whether these reforms could have an unintended consequence.
If vendors are encouraged to set more realistic reserves concluded from real market feedback, buyers may enter auctions with greater confidence, knowing the property is genuinely within reach.
More buyers may engage.
More buyers may bid.
And once the reserve is met, the auction is no longer about negotiating with the vendor.
It becomes what auctions are designed to do—create competition between buyers.
Transparency may not reduce competition. It may simply shift the competition from seller versus buyer to buyer versus buyer.
There is another aspect of these reforms that I don't think has received enough attention.
For most Australians, their home is their largest financial asset. These changes introduce greater regulation around how homeowners can choose to market and sell that asset. Whether that strikes the right balance between consumer protection and homeowner autonomy is a separate discussion—but an important one.
Ultimately, only time will tell whether these reforms change auction outcomes.
But I do wonder whether we've focused so heavily on what they may take away that we've overlooked what they might inadvertently create.
