Underquoting Returns as Property Market Rebounds

Signs of a recovering property market are becoming more visible, and one of the most noticeable and contentious trends has made a strong return: underquoting. As home values rise and auction activity intensifies, some real estate agents are advertising properties at prices well below expected selling figures in an effort to generate more buyer interest. While this approach can increase attention, many first-home buyers are being caught off guard when final sale prices far exceed the initial estimates.

Australia’s property market is clearly shifting. Auction clearance rates have hit highs, with Cotality reporting a rate of 74.4%. Economists now expect that standalone house prices could rise by 6% each year through 2025 and 2026. Much of the current market activity is being driven by first-home buyers who are motivated by various incentives and stable interest rates. At the same time, underquoting, often seen during periods of intense demand, is becoming widespread once again.

In regions such as New South Wales and Victoria, where market recovery has been strongest, government regulators are stepping up enforcement. Victoria has launched a task force focused specifically on underquoting after receiving over 4,200 consumer complaints. Despite these efforts, enforcement remains difficult. Many agents argue that rapid market changes make it challenging to price homes accurately since the gap between listing and final sale price can change quickly.

Although underquoting is illegal when it involves intentional deception, proving that intent remains a challenge. Consumer Affairs Victoria reports that many of the complaints come from within the real estate industry itself. The issue often stems from subtle tactics such as listing homes with price guides that are deliberately underestimated. This encourages competitive bidding but leaves many buyers outbid and disappointed.

Some professional associations argue the problem is exaggerated, pointing to a small number of confirmed legal violations. Others believe thousands of buyers who encounter underquoting never report it. Instead, they withdraw from the process, assuming disappointment is part of a competitive market. As property prices continue to rebound, the distinction between realistic pricing and misleading advertising may become increasingly unclear.

Source: The Australian, Property Update, API Magazine

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