Melbourne’s property market remains one of Australia’s most competitive, with auctions driving much of the action. However, a persistent issue continues to frustrate buyers: underquoting, where agents advertise properties at prices below the seller’s expected or reserve price to attract more interest. As of early 2026, data from 2024-2025 reveals widespread underquoting, particularly in certain suburbs. Recent government reforms aim to curb this practice, but buyers must stay vigilant.

What Is Underquoting and Why Does It Happen?

Underquoting occurs when a real estate agent quotes or advertises a property at a price lower than the seller’s reserve, a previously rejected offer, or the agent’s own estimated selling price. This illegal tactic draws larger crowds to inspections and auctions, intensifying competition and often pushing sale prices higher.

Agents may use it to generate buzz in a rising market, especially when sellers set ambitious reserves. In competitive areas, it spreads as agencies compete for listings. A major 2025 investigation by The Age analysed nearly 26,000 Melbourne auction sales from January 2024 to June 2025 and found over half sold above the advertised price guide’s top end—highlighting how underquoting misleads buyers and inflates expectations.

Key Underquoting Hotspots in Melbourne

Data identifies clear hotspots, mainly in northern, eastern, and outer suburbs where median prices range from affordable to mid-tier, drawing first-home buyers and families.

Northern and North-Western Suburbs

Keilor Downs → Nearly 90% of tracked properties sold above the guide, averaging $69,529 over.
Tullamarine, Gladstone Park, Westmeadows, Taylors Hill, Mill Park, and Greenvale → At least 80% sold above the top guide.
Inner north areas like Thornbury and Coburg → Around 70% exceeded the guide.

Experts predicted surges in areas like Thomastown, Lalor, Epping, and Sydenham due to market heat and interstate buyers.

Eastern and South-Eastern Suburbs

Ringwood North, Blackburn North, and Blackburn South → At least 80% sold above the guide, with Blackburn North averaging $113,687 over.
Other areas like Clayton, Glen Iris, Ormond, Carrum, and Hawthorn East → Properties sold at least $92,000 above the top guide on average.
Box Hill and outer east suburbs also face high risks.

These patterns tie to agent practices in growth corridors, where demand outpaces supply.

Impact on Buyers and the Market

Underquoting erodes trust and disadvantages buyers, especially first-timers who budget based on advertised prices only to face much higher bids. It fuels overbidding, with examples of properties selling $200,000–$300,000 above guides. Townhouses prove most affected, with over 56% exceeding ranges.

In a recovering market post-2025, with predicted price growth, underquoting worsened before reforms. It also prompts calls for stronger regulation, as fines alone failed to deter it.

Recent Reforms and Future Outlook

In November 2025, Victoria announced Australian-first laws requiring agents to publish the seller’s reserve price at least seven days before auction, updating all marketing accordingly. Failure could halt the sale. New guidelines mandate better comparable sales for price estimates.

These changes, set for 2026 implementation, promise greater transparency. The Real Estate Institute of Victoria supports action but urges careful rollout. Early 2026 should see reduced underquoting, though buyers should still research independently.

FAQ

What exactly is underquoting? Underquoting happens when an agent advertises a property below the seller’s reserve, a rejected offer, or their estimated price, misleading potential buyers.

Is underquoting illegal in Victoria? Yes, it’s prohibited, with new 2025-2026 laws mandating reserve disclosure seven days pre-auction.

Which Melbourne suburbs have the worst underquoting? Hotspots include Keilor Downs, Blackburn North, Ringwood North, Thornbury, Coburg, Mill Park, and parts of the outer north and east like Box Hill and Clayton.

How can buyers protect themselves? Research recent sales, ask agents for price justifications, review the Statement of Information, and treat advertised prices as starting points only. Consider buyer’s advocates in high-risk areas.

How do I report suspected underquoting? Contact Consumer Affairs Victoria online with the property address, ad screenshots, and evidence explaining the misleading nature.

Will the new laws stop underquoting completely? They should significantly reduce it by enforcing transparency, though market competition may still drive prices above reserves.