REIV: New auction rules will make a Vic market tougher

The Real Estate Institute of Victoria (REIV) is urging the state government to reconsider upcoming changes to auction regulations as property clearance rates continue to struggle. Starting October 1, 2026, agents will be required to disclose reserve prices at least seven days prior to a sale, a move the industry body warns could further dampen market confidence. This regulatory shift comes as Melbourne faces declining median house values and a trend of clearance rates falling below 50 percent, signaling a period of significant uncertainty for the state's residential sector.

REIV Chief Executive Toby Balazs has expressed deep concern over the Victorian government's mandate for early reserve price disclosure, arguing it may drive participants toward less transparent sales methods. The call for a rethink follows a period of weak performance where clearance rates have consistently hovered between 40 and 55 per cent over the last two months. For instance, while Victoria saw a preliminary clearance rate of 55.8 per cent from 311 results this week, final figures often undergo downward revisions, such as the previous week’s drop to a final 47 per cent result.

Market data highlights the current strain on the sector, with Melbourne’s median house value slipping to $984,000 as of June 2026, which is less than the value recorded 12 months earlier. Industry leaders like Justin Tong of Hocking Stuart Werribee suggest that while quality homes in prime locations still attract buyers—evidenced by the $796,500 sale of a three-bedroom home in Werribee—the broader market faces headwinds from federal changes to capital gains tax and negative gearing. Vendors are reportedly hesitant to list properties due to a lack of clarity in regulatory and tax settings, which Balazs believes is stifling transaction volumes and investor confidence.

Despite the challenging environment, some agencies continue to advocate for auctions over private sales due to the safer nature of unconditional purchases. Ray White director Shane Leete noted success in St Helena, where a property fetched $930,000 despite an initial low bid of $700,000 that was far below the $850,000 to $910,000 listing range. Additionally, the federal government’s first-home buyer scheme, which supports 5 per cent deposits on properties under $950,000, is providing a floor for the sub-$1 million market, as seen in the $785,000 sale of a Brunswick West home by Nelson Alexander which sold slightly above its $775,000 reserve.