What’s happening with Melbourne auctions right now?

This weekend marks the second weekend of mandated, 7-day reserve price disclosure. The disclosures don’t only relate to auctions, but to any private sales with end dates. These are typically known as “Expression of Interest” campaigns, or sometimes “Set Sales”.

By law, agencies are now required to list the vendor’s reserve price for seven days prior to auction or EOI. While many buyers will say this is a good change, like any new legislation, there are challenges. For example, the way that pre-auction offers are now dealt with. If an acceptable offer is received prior to auction, but after the seven-day reserve disclosure period, an agent can treat this offer like they would a private sale campaign.

However, like many auction campaigns, it is fair to assume that there are other interested parties. An agent serves their vendor well when they ensure that no interested buyers are overlooked. Typically, the agent(s) would have contacted all buyers who inspected the property and left their contact details. An SMS or a phone call is standard practise. In order to give everyone a fair opportunity to challenge the acceptable pre-auction offer, the agents would set a deadline and then determine whether there are competing buyers or not. In the case of competing buyers, agencies could either host a transparent showdown, (like a zoom boardroom auction), or ask the parties to all submit their best and highest offer, (including the buyer who made the initial offer).

Now our legislation does not permit the agent(s) to set a deadline for buyers.

With a precarious scenario at their fingertips, what are they to do?

Some agents are using clear dialogue on text such as “Dear Buyer – we have received an acceptable pre-auction offer on 2 High Street, Darlington. If you have any interest in this property, please contact us immediately, as the vendor will otherwise sell the property.”

Agents are not likely to choose to re-set a new reserve price in order to host an online auction, as seven days is a long time to keep an interested buyer dangling. To do so would be very risky for the campaign, and could undermine their vendor’s best interests. Seven days of waiting it out could easily entice a keen buyer to look elsewhere, and the campaign could topple over, or in agent’s language, “get cooked.”

Vendors will either accept the early offer and leave it in the hands of the agent to determine how to field other interested buyers…. or the vendor will refuse the early offer. Interestingly, unlike our previous auction quoting laws, the vendor is now no longer legally required to adjust their stated reserve, even if the pre-auction offer is higher. They simply have to state that they are rejecting it because they wish to proceed with their auction or EOI.

Buyers now need to be very cautious about making pre-auction offers, because they may find themselves at a disadvantage if the way that their offer is dealt with is not transparent. The benefit of a transparent process where buyers can see their competition in the street is what makes auctions so much fairer for buyers. If this is undermined by a “best and highest” blind bidding scenario, or worse still, a text message with limited visibility on available timeframes, buyers won’t feel protected at all.

In an already challenging market with lower confidence and fewer listings than usual, it is no surprise that buyers are less confident with their auction participation.

So far, we have had two weekends now with the new rules, and the auction clearance rates tell an interesting story.

According to the REA data as at Sunday 25th AM, based on the 690 available results, only 35.5% of scheduled auctions sold under the hammer in Melbourne.

A whopping 28.7% passed in, and 16.2% were withdrawn from auction sale altogether. And that is just based on the available results.

What is really telling, however is the auction volume. Late October, by anyone’s measure, is usually Melbourne’s busiest period. In fact, the weekend before the Melbourne Cup ‘long’ weekend is often the busiest weekend of the year…..or at least one of. However this season is proving to be different.

“Melbourne recorded its biggest auction weekend in nearly four years on the weekend of October 25–26, 2025, when 1,835 residences went under the hammer.” (Source: AFR)

As a buyer’s agent, I wouldn’t dream of booking a holiday, or RSVP’ing to a lunch on the second last Saturday of October. Yet, this weekend, I took the whole day off and walked through the Otway forest. I loved my weekend, but it’s not a healthy gauge of our auction market at all.