The NSW government is moving to reshape the state's property market by forcing sellers to advertise price guides and imposing penalties so steep that breaking the underquoting laws becomes genuinely costly. The Minns Labor Government is set to overhaul the state's underquoting laws, with consultation beginning on proposed reforms to lift professional standards across the real estate sector, improve transparency in property listings and boost buyer confidence.
What prompted the action is stark. The proposed changes aim to crack down on misleading price estimates in property listings, a practice known as underquoting, which leads to buyers wasting time and money pursuing homes that are well out of reach. According to reporting that investigated thousands of Sydney sales, the scale of the problem is significant: nearly half of all auctions tracked sold more than 10 per cent above the quoted guide, with 16 per cent selling 20 per cent or more above the advertised range.
The centrepiece of the new regime is a dramatic increase in penalties. Significantly increased penalties for underquoting from the current $22,000 to $110,000 or three times the agent's commission, whichever is greater. For a $2 million property sold by an agent earning 2 per cent commission, that can mean a $120,000 fine for underquoting, making it far less attractive to risk legal action for a quick sale.
Mandating a price or price guide on all advertising so prospective buyers don't waste their time on properties outside of their budget. Agents will also face restrictions on how they present prices; they cannot advertise a price lower than a previously rejected written offer or the highest unsuccessful bid at auction. Requiring agents to publish a Statement of Information (SOI) to help prospective buyers understand how the selling price was calculated, including comparable sales and suburb median prices.
NSW Better Regulation and Fair Trading Minister Anoulack Chanthivong framed the changes as serving the public interest. "By significantly increasing penalties for underquoting, we are ensuring misconduct can no longer be written off as a cost of doing business, but as a meaningful deterrent." The government also plans to expand Fair Trading's disciplinary powers, allowing public admission of misconduct, independent valuation verification, and suspension of sales activities.
The reforms do not require vendors to disclose their auction reserve price ahead of auction day, separating NSW's approach from Victoria's emerging model. Victoria introduced laws requiring reserve price disclosure at least seven days before auction, a step NSW is tightening penalties for underquoting, but its approach remains focused on accurate price guides rather than reserve price disclosure. Some argue that Victoria's reserve disclosure model goes too far, but others say it closes a critical loophole where sellers could advertise one price and then bid the auction up from a much higher reserve.
The NSW government argues its approach balances consumer protection with practical implementation for the real estate industry. The proposed laws will ensure NSW Fair Trading's Strata and Property taskforce can take meaningful action against misleading conduct in property advertising and transactions and clean up the NSW market. The reforms are expected to be introduced to Parliament in 2026, following the consultation period.
For buyers, the impact could be substantial. Thousands have reported wasting time and money investigating properties they ultimately could not afford. Clearer price guides and meaningful penalties for underquoting should reduce that waste. But genuine questions remain about whether forcing transparency is enough, or whether the reserve price itself needs to be disclosed earlier to avoid the situation where a property advertises one way and sells from a much higher minimum.