Kiwi buyers still favour auctions despite transparency debate
Across the Tasman, agents and sellers in Victoria will soon be required to reveal their reserve prices at least a week before auction under new rules aimed at clamping down on underquoting.
The reforms, due to take effect next year, build on NSW measures that mandate price guides on all property advertising and allow fines of up to A$110,000 for agents found to be gaming the system, after media investigations uncovered widespread underquoting, OneRoof reported.
New Zealand buyers, however, are unlikely to see anything similar, with the Government signalling no appetite for forcing advance disclosure of reserve prices.
Government: ‘Not on our radar’ in New Zealand
Asked by OneRoof if New Zealand would consider legislation requiring reserve disclosure, Housing Minister Chris Bishop (pictured left) said: “This is not something on our radar as most houses in New Zealand are not bought and sold via auction.
“Our focus is on fixing the fundamentals of the housing market. You can have as many rules as you like about property sales, but the only real fix for affordability is dealing with the fundamentals — i.e. supply.”
Labour, which is planning to introduce a capital gains tax to improve housing affordability, is more open to the idea.
“This isn’t something we have considered as a caucus, but I am interested to see how it is implemented in Victoria,” housing spokesman Kieran McAnulty (pictured right) told OneRoof.
‘Win for transparency’ – but mixed industry views
Nick Goodall, head of research at property insights firm Cotality NZ, said Australia’s crackdown was “a win for transparency”.
Goodall believed publishing auction reserves would help set realistic price expectations, “which can only be a good thing for prospective buyers, especially inexperienced first-home buyers going into the unknown”.
“Vendors and some real estate agents may feel frustrated when it’s first introduced, but I think they’ll quickly adjust to the new norm, with it just becoming part of the process,” he said.
Auction sales in New Zealand in October totalled 1,310 nationally, 17.5% of all sales for the month, according to the Real Estate Institute of New Zealand. Auckland remains the country’s auction capital, with under‑the‑hammer deals making up 29.2% of October sales in the city.
NZ agents warn against ‘ludicrous rules’
Tom Rawson, co-owner of Ray White Manukau, Mangere, Mangere Bridge, and Manurewa, argued that Victoria’s changes cut across the very purpose of auctions.
Rawson said an unintended consequence could be more sales moving to private treaty – a method he sees as less transparent and more prone to buyers missing out by small margins.
“We get a lot of complaints every year around these multi-offer scenarios, which is effectively what an auction is, but behind closed doors," he said.
“An auction is multiple people bidding for it at the same time – a multi-offer is multiple people fighting for it at the same time, but they don’t get to see what the other one paid.”
Rawson said one area that could be tightened up in New Zealand was around buyers spending heavily on due diligence for properties ultimately beyond their reach – an issue he sees driving much of the frustration in Australia.
“People are thinking they can buy for $1m and then it sells for $1.3m,” he said.
Rawson stressed the tension between buyer and seller expectations: “Obviously, everyone wants to buy for as little as possible and sell for as much as possible, and that’s just a conundrum we have.
“It’s funny because when you’re selling you want a big crowd of people to turn up and everyone to fight for your property and when you’re buying, you want no one to turn up and for you to be the only one there.”
The Ray White leader said auctions generally worked well in New Zealand, with about half of his branches’ sales done by auction. That, Rawson said, may mean more properties remain available to conditional buyers via other sale methods, rather than everything being pushed into cash‑only auction campaigns.
“Maybe we are different in that regard to Australia, and we don’t need to have ludicrous rules brought in where owners have to tell people what the reserve is a week out from the auction," he said. "In New Zealand, right up until the fall of the hammer, they can change the reserve, and often do.”
He cited a recent example where a client dropped their $2m reserve by $1m on auction day.
“We would be so far out of whack if we had advertised at a $2m reserve a week before – no one would turn up. The ability in New Zealand to be flexible is great,” Rawson said.
Debate continues across the Tasman
Reaction in Australia to Victoria’s proposed legislation has been mixed. Some argue the changes will improve transparency and save buyers time and stress, while others say they risk backfiring.
Melbourne academic Dr Peyman Khezr of RMIT told the Herald Sun the reforms would ultimately cost sellers money and do little to stamp out underquoting.
Cotality’s Australian head of research, Eliza Owen, told OneRoof that Melbourne is the country’s most auction-centric city, with auctions representing about 40% of new listings since 2008.
But Owen said it was difficult to quantify how widespread underquoting is.
“In late 2022, a taskforce was established to mitigate the practice and has seen around 5000 complaints, but between the end of 2022 and November 2025, there have been around 348,000 sales across Victoria,” she said.
Five thousand complaints was still substantial, but the data was muddied by market cycles.
“In a downswing sale prices are more likely to be less than the advertised price, and in an upswing properties often sell for more,” Owen said.
She said Cotality expected Victoria’s move to bolster transparency. She noted that Australian auction campaigns typically ran for around four weeks, giving agents and vendors time to agree a reserve seven days out.
“However, it may place some vendors at more of a disadvantage if key market information shifts within the seven-day period of the auction, such as a decision around interest rates, or comparable sales,” the Cotality economist said.
For buyers, especially first‑home hopefuls, the stakes remain high regardless of the sale method. Kiwibank research shows 85% of New Zealanders still see homeownership as central to the “Kiwi dream”, and nearly half of non‑owners now view buying as more achievable than a year ago while ASB’s latest housing confidence survey and growing enquiry to non-bank lenders point to a rare “sweet spot” of low mortgage rates, high listings, and still‑subdued price expectations – a level of intent that puts a premium on clear price signals and good advice throughout the sales process.
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