Melbourne home auctions: Pundits call on Victorian government to tighten auction rules

Property experts are calling for auction reform in Victoria that reflects other parts of the nation to protect buyers and sellers from losing thousands of dollars. SEE WHY.

Real estate experts are calling on the Victorian government to reform its auction rules.

Property experts are calling on the Victorian government to strengthen the states ‘worst practices’ at auctions to protect buyers and sellers from losing thousands of dollars.

Disingenuous bidding has become a growing problem in the industry, with anyone welcome to place an offer on a home under the hammer even if they haven’t seen the residence and can walk away without punishment.

Prospective purchasers of a home in New South Wales and Queensland can only bid at a property’s auction if they have registered with the listing agency.

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And if the top bidder tries to walk away from a sale after its auction, the real estate agency can sign a contract and purchase the property on their behalf.

Ray White Cheltenham agent Greg Brydon said the state needed to reform its auction rules to ensure both buyers and sellers were protected.

Mr Brydon said at an auction last weekend, the highest bidder’s offer fell through and one of the underbidders ended up purchasing the home for $10,000 less than the top offer.

“In Victoria we need reform, we need bidder registrations to ensure this doesn’t happen,” he said.

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“We’re not reinventing the wheel. We’re not changing the world. We’re just adopting what the other eastern seaboard states that do less auctions than Victoria does.

“We’re the auction capital of Australia, probably the world, and we’ve got the worst practices.”

Despite being the auction capital of the nation, Victoria hadn’t met modern expectations when it came to its auction system, Mr Caine said.

Real Estate Institute of Victoria (REIV) president Jacob Caine said despite Victoria being the “auction capital” of the nation and leading the way with rental legislation and regulation, the state hadn’t met modern expectations when it came to its auction system.

“The REIV supports the concept of bidder registration; In any given year, we will have somewhere between 30,000-40,000 auctions,” he said.

“Instances like those that you’re reporting on happen too frequently and cause significant frustration, upset and financial harm to people involved and that’s on both sides of the equation.”

He added that the person who decided to bid on a property without any intention of actually buying it and drove its price up took away someone else’s chance to buy the home but now couldn’t afford it.

Mr Caine said mandatory bidder registration needed to be changed by the state government.

Mr Caine said some Victorian real estate agencies were taking matters into their own hands and imposing mandatory bidder registration, but because it was not the “norm”, there were buyers who pushed back on the idea.

However, he said in order for it to be effective, mandatory bidder registration needed to be either universally adopted across the industry or the state government needed to change the rules.

“Clear guidelines and expectations of bidders at auctions will go a long way to creating peace of mind for particularly the buying public that find the lack of transparency to be anxiety inducing,” he said.

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Originally published as Melbourne home auctions: Pundits call on Victorian government to tighten auction rules