‘No clarity’: New rules leave home buyers and sellers in the dark

Home buyers and sellers trying to research sale prices for properties in their area have been left in the dark about where to find information under new state laws that begin on Thursday.

From October 1, Victorian real estate agents will be required to disclose the sale price of a home within seven days of a sale, and make this information publicly available for at least 18 months following the sale. This can be disclosed on the Property Price Statement (which will replace the Statement of Information).

The sale price, however, will only have to be reported by agents to the director of Consumer Affairs Victoria from December 1, 2027.

It remains unclear where consumers can find sale prices for properties that are sold off-market, without being listed on online property portals – a common practice for higher-priced homes.

The new laws aim to improve transparency as it’s not unusual for recently sold properties to have their price listed publicly as “withheld” or “contact agent”, handicapping Victorian buyers trying to gauge price trends in their local area or to assess the accuracy of advertised guides.

The aim of the laws is to enable buyers to compare the initial estimate and reserve price with what a property actually sells for, a government spokesperson said. Agents who do not comply with underquoting laws risk a penalty of more than $48,842 and forfeiting of their commission.

Disclosing the sale price publicly is part of a suite of laws Labor has introduced to stop underquoting in Victoria, which passed a few weeks ago.

Underquoting can occur when a property is advertised at a price that is less than the estimated selling price, is less than the seller’s asking price, or has already been rejected by the vendor.

The government says the changes, inspired by this masthead’s Bidding Blind investigation, are designed to improve price transparency for home buyers, help tackle underquoting, and make property sales fairer and clearer. From October 16, all auctions must have the reserve price made public a week in advance.

However, real estate agents remain confused as to where they should publish the sale prices, particularly in the case of off-market sales, with Marshall White Group sales director John Bongiorno saying: “That’s a good question – we will probably just publish a list of sales on our website.”

“Eventually, we will find our way through it, but for the time being, we will address it according to the laws where they are clear,” he said. “I think [the lack of clarity] sums up this whole government, who has no clarity on anything.”

Buyer’s agent for high-end properties David Morrell estimates about 90 per cent of sales valued at $5 million and above are already happening off market.

But Morrell did not think the sale price disclosure laws apply to off-market sales: “For off-market sales, you don’t actually have to publish – the law doesn’t apply to off market.”

The Age sought clarification from the state government, and was told sale-price disclosure rules will apply to all sales of residential property involving a real estate agent.

Shadow spokeswoman for consumer affairs Jade Benham said she had asked the government several times to clarify whether off-market sales were included in the disclosure laws, but has received no answers.

“They [Labor] haven’t addressed it with me, [even though] it’s also a question where I asked, and we are in a market that we see more off-market deals happening than ever,” she said.

Morrell has seen a rise in off-market sales as the state election and Christmas loom, and amid a receding market.

“You don’t go to the market now unless you’re part of the three Ds: death, divorce and downsizing.”

Driven by the inner city and the inner north, the off-market trend is only set to grow as agents disclose prices and reserves in the coming weeks, Morrell said.

“The market has gotten skinnier. If you go out there and put yourself up for auction with a disclosed reserve, you’re gonna get headbutted.”

Real Estate Institute of Victoria (REIV) chief executive Toby Balazs said the legislation doesn’t talk to the advertisement for a property; it talks to the need for the sale price of a property to be made available.

“So that’s where an off-market property would still have a requirement, once the contract is signed between buyer and seller, that that property’s sold price is made available,” he said. “You would think it’d be one of the big property platforms, an REA or a Domain, but it doesn’t stipulate – it says ‘freely and publicly available’.”

The opposition’s Benham said the changes were unnecessary, and would only encourage people to sell “behind closed doors”.

“As far as consumer protections go, the transparent process of the auction is being able to see your competition and understand you have other bidders, or there is no one else bidding on the property and you have the upper hand,” she said.

Benham added that the legislation would make it harder to crack down on bad actors, who would be hiding “behind closed doors without the line of sight that an auction offers”.

Minister for Consumer Affairs Tim Richardson said underquoting “isn’t fair”.

“It’s young Victorians and families paying the price – that’s why we’re stamping it out by requiring reserve prices to be published at least seven days before an auction,” he said.

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