PHOTO: According to regulators, advertised price guides were allegedly set significantly below what agents believed the homes would actually sell for. FILE.
Australia’s ongoing battle against underquoting has entered a significant new chapter, with Consumer Affairs Victoria (CAV) launching Federal Court proceedings against a prominent Melbourne real estate agency and three experienced sales agents over allegations they deliberately misled buyers during multiple property campaigns.
The legal action is one of the most significant underquoting cases pursued by Victorian regulators in recent years and highlights the increasing scrutiny facing Australia’s residential real estate industry.
If the allegations are ultimately proven in court, the penalties could be substantial and may further reshape how residential properties are marketed across Victoria.
What Are The Allegations?
Consumer Affairs Victoria alleges the agency formerly trading as Harcourts Judd White, now operating as Ray White Judd White Group, underquoted the expected selling prices of 11 residential properties located throughout Melbourne’s eastern suburbs, particularly Glen Waverley and Wheelers Hill.
According to regulators, advertised price guides were allegedly set significantly below what agents believed the homes would actually sell for.
Consumer Affairs also alleges:
- Buyers were attracted to inspections using unrealistically low advertised price ranges.
- Vendors entered commission agreements that dramatically increased agent commissions once sale prices exceeded certain thresholds.
- Some commission arrangements allegedly increased payments by up to five times the normal commission rate.
- Internal communications allegedly suggested agents expected substantially higher sale prices than those publicly advertised.
Perhaps the most damaging allegation is that one or more agents allegedly reassured a vendor that advertising below market value was simply “all strategy.”
Those allegations remain before the courts and have not been proven.
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Open Homes Continued Despite Court Action
In a move attracting considerable attention, one of the agents named in the proceedings continued conducting an open home inspection on Saturday afternoon—only hours after Consumer Affairs publicly announced the legal action.
The inspection was held at a Glen Waverley property advertised with a guide between $1.39 million and $1.49 million.
One prospective purchaser attending the inspection told media that underquoting had become an accepted part of Melbourne’s property market.
“It’s been going on for years… I think it’s an issue across the whole industry.”
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Why Underquoting Matters
Underquoting has long frustrated Australian home buyers.
When price guides are significantly below a property’s likely selling price, buyers may:
- Spend money on building inspections and legal advice unnecessarily.
- Waste weekends attending inspections for homes they cannot realistically afford.
- Experience repeated disappointment after emotionally investing in properties.
- Lose confidence in advertised price guides altogether.
For sellers, underquoting can also distort expectations and undermine confidence in the sales process.
Ray White Responds
Ray White acknowledged the seriousness of the allegations but noted the conduct being investigated predates the agency’s acquisition of the business.
The company said the agents now operate under much stricter compliance systems.
Ray White also stated it has invested heavily in technology designed to detect and prevent:
- Underquoting
- Non-compliant commission structures
- Compliance breaches across its national network
The allegations themselves relate to the period when the business operated under the Harcourts Judd White brand.
Stronger Laws Already On The Way
The timing of the court proceedings comes just months before Victoria introduces even tougher underquoting legislation.
From 1 October, selling agents will be required to publicly disclose a property’s genuine reserve price at least seven days before auction, giving buyers greater transparency and reducing opportunities for misleading price guides.
The reforms are widely seen as one of the biggest regulatory changes to Victorian property sales in years.
Penalties Could Be Severe
Consumer Affairs Victoria has not yet indicated the penalties it will seek should the court uphold the allegations.
However, under Victorian legislation, maximum penalties can reach:
- Up to $100 million for corporations
- Up to $2.5 million for individuals
Earlier this year another Melbourne agency, Ray White Oakleigh, was fined $600,000 after being found guilty of underquoting multiple properties.
The latest proceedings suggest regulators are prepared to pursue much larger and more complex cases as they attempt to restore confidence in Melbourne’s property market.
Property Noise Australia
Whether these allegations are ultimately proven will now be determined by the Federal Court.
What is already clear, however, is that Australian regulators are intensifying enforcement against misleading property pricing practices. Buyers increasingly expect greater transparency, sellers want confidence that their homes are being marketed fairly, and agencies face growing pressure to ensure every advertised price reflects a genuine estimate of market value.
The outcome of this landmark case is likely to be watched closely by real estate professionals, buyers and sellers across Australia, as it may help shape how property is marketed for years to come.