Proposed Auction Reforms and New CAV Guidelines: What Victorian Agents Need to Know

By Rex Afrasiabi, Lawyer for Real Estate Agents

There has been significant discussion across the Victorian real estate sector this week following news of proposed changes to auction laws, including a suggestion that agents and vendors may be required to publish the reserve price one week before auction.

It is important to be clear. No legal change has taken place. The reserve price disclosure concept is a proposal only, and further consultation is expected next year.

For now, all auction practices remain exactly the same.

While these potential reforms have generated attention, a far more immediate change has already taken effect, and it affects every Victorian real estate agency.

New Comparable Sales Guidelines Now in Effect

In early November, Consumer Affairs Victoria released updated guidelines that clarify how agents must select comparable sales for their Statement of Information.

Under the current underquoting laws, agents must already identify three recently sold properties in the local area to establish a reasonable selling estimate.

Consumer Affairs Victoria has expressed concern that too many agents have been choosing properties that differ in important characteristics and that sold for a lower price. In the view of the regulator, this can mislead potential buyers.

“Using the wrong comparable sales is not a minor oversight,” says Rex Afrasiabi. “If the properties are not genuinely similar, the Statement of Information will not reflect a realistic selling range and CAV will issue a fine.”

To address this, the regulator has strengthened and expanded the criteria that agents must apply.

Key Factors Agents Must Now Consider

Agents must continue to assess condition, standard, location and date of sale, but Consumer Affairs Victoria has placed additional emphasis on four specific elements:

• Whether the property was renovated or unrenovated

• The build status such as fully constructed homes compared with vacant land

• Recent near identical sales within the same estate or apartment building

• School zones, access to retail centres and broader neighbourhood features

“The expectation is clear,” Afrasiabi explains. “If there are two nearly identical properties that sold around the corner, those should be your comparables. Convenience is no longer an excuse for selecting the wrong properties.”

A Firm Compliance Environment

These strengthened guidelines signal a clear message from the regulator regarding underquoting.

“Compliance is absolutely essential,” Afrasiabi states. “Agents face significant risk if they continue using comparables that do not reflect the true nature of the listing. The reputational cost alone can be severe.”

The direction from Consumer Affairs Victoria can be summarised simply.

Choose accurate comparable sales. Follow the guidelines. Protect your business.

What Agents Should Do Next

Every agency should now review its approach to preparing Statements of Information and ensure its internal processes align with the updated requirements.

Training teams, documenting procedures and conducting regular audits will help minimise risk.

“This is the right time for agencies to get their systems in order,” Afrasiabi says. “If there is any doubt about whether your current processes comply, seek advice. It is always easier to prevent a compliance issue than to defend one.”