As auction volumes bounce back across Australia, the Real Estate Buyers Agents Association of Australia (REBAA) is urging property buyers to remain vigilant against dummy bidding, warning that the illegal practice continues to distort auction outcomes.
REBAA president Melinda Jennison (pictured) said many buyers still don’t understand the seriousness of dummy bidding and the consequences it can carry.
“A dummy bid is a false bid by a non-genuine bidder in the crowd, usually to influence the sale price, at either an on-site or in-rooms auction,” Jennison said. “Sometimes these dummy bids are made by friends or family of the vendor, or they may come from people associated with the sales agent.”
She noted that while laws exist to prevent the practice—such as bidder registration requirements and penalties for misconduct—the potential for auction manipulation remains a concern.
Jennison said the biggest danger of dummy bidding is the false sense of competition it creates among genuine bidders, often pushing prices beyond fair market value.
“This can result in buyers overpaying for properties, leading to financial strain or even mortgage difficulties,” she said. “Additionally, the practice erodes trust in the auction system, making buyers hesitant to participate in future auctions.”
With more than 1,600 homes auctioned across the capitals in the first week of May, according to Cotality data, activity is rising—but so is the need for transparency.
Jennison advises buyers to be proactive in understanding auction rules and spotting red flags in bidding behaviour.
“As authorities continue to crack down on fraudulent practices, awareness remains key to ensuring fair and transparent property transactions,” she said. “Consumers must be aware that it is an offence for any person to arrange for another person to make a false bid at an auction.
“Not only that, genuine bidders at auctions should be aware of who else is bidding to ensure they are also above board. If in doubt, bidders have the right to ask the auctioneer to indicate who else made a bid.”
Jennison cited a recent in-room auction in Brisbane.
“It was clear that there were dummy bids being submitted during the auction in an attempt to increase the final sales price,” she said.
Jennison emphasised that buyers who suspect illegal bidding activity should not stay silent.
“Dummy bidding is illegal and those who perpetrate this insidious practice should be prosecuted,” she said.
REBAA urges consumers to report suspected dummy bidding to the relevant statutory authority in their state or territory. Increased awareness and stronger enforcement, Jennison said, are key to protecting auction integrity in an increasingly competitive housing market.
