MEDIA RELEASE
The Victorian Government’s introduction of legislation requiring sellers to disclose auction reserve prices seven days before auction will have a counter-productive effect on price transparency and worsen the buying experience for Victorians.
The Real Estate Institute of Victoria (REIV) is flabbergasted by the Victorian Government’s decision to introduce the legislation, saying it ignores both commonsense and the evidence-based expert warnings from experienced property professionals and participants.
The legislation will not achieve its intended objectives, rather it will:
1. Cause sellers to move to other sale methods which move negotiations behind closed doors.
2. Lead sellers to poorly informed reserve price decisions, creating an environment where published reserves become inconsequential and offer little meaningful guidance to buyers.
Independent research commissioned this year by the REIV found that 94 percent of Victorian property owners said they would fundamentally change their selling strategy if forced to disclose their reserve price seven days before auction.
In its eight recommendations to the Victorian Government on this issue, the REIV recommended a requirement that vendors instead publish a 10 percent reserve price range three days prior to auction, which would promote greater transparency and benefit all participants of property transactions.
Toby Balazs, CEO of the REIV said both Victorian sellers and buyers lose out under the new legislation.
“While the government’s effort to address underquoting and improve the transparency of property transactions are well intended, its decision to move ahead with these laws will result in a real estate market with less transparency. It will lead to fewer auctions in Victoria and more buyers in situations where they’re unable to see who they are competing against.
“It beggars belief that, despite a mountain of evidence and warnings of the unintended consequences, the Government has gone ahead with this illogical and quite frankly reckless mandate.
“Listening to experience, expertise and data must be integral to legislative reform.”
Media Contact: media@reiv.com.au 03 9205 6607 www.reiv.com.au