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  • Passed InWhen the highest bid at auction does not reach the vendor's reserve price. The property does not sell at auction. The highest bidder typically gets the first right to negotiate with the vendor after the auction.
  • Penalty unitA standardised measure used in Victorian legislation to set fine amounts. The dollar value of a penalty unit is indexed annually. As of 2025, one penalty unit equals approximately $197.59, making a 240-penalty-unit fine worth $47,422.
  • Pest InspectionA specialist inspection that identifies timber pests (termites, borers, wood decay fungi) and the conditions that attract them, such as moisture and soil contact with timber framing. The report covers both active infestations and high-risk areas.
  • Pest Inspection (Timber Pest Inspection)A visual assessment of a property for evidence of timber pest activity, conducted in accordance with Australian Standard AS 4349.3-2010. It covers subterranean termites, dampwood termites, borers of seasoned timber, and wood decay fungi. It does not cover drywood termites, mould, or rodents.
  • PEXAProperty Exchange Australia — the electronic settlement platform used for most property transactions in Australia. PEXA processes document lodgement, fund transfers, and title registration digitally, so parties do not need to physically attend settlement.
  • Pre-ApprovalA conditional commitment from a lender confirming you are eligible to borrow up to a specified amount, based on your current financial position. It typically lasts 3 to 6 months and does not commit you to taking the loan.
  • Pre-approval in principleAn indication from a lender that they would likely lend you a certain amount based on your financial situation. It is not a guarantee and has not been assessed against a specific property. Not sufficient for auction bidding where contracts are unconditional.
  • Pre-auction valuationThe price range you set for a property before auction day, based on comparable sales and your own research. It becomes the ceiling you pre-commit to so that in-auction pressure cannot push you past a number you would regret.
  • Pre-commitmentA behavioural economics strategy where a person locks in a decision or constraint before facing pressure. Writing down criteria before searching is a pre-commitment device that reduces impulsive compromise.
  • Pre-Settlement InspectionA walk-through of the property in the days before settlement to confirm the property is in the same condition as at the contract date. This is not a building inspection — it checks for damage, removal of fixtures, or items left behind.
  • Price ceilingThe absolute maximum dollar amount you will pay for a property at auction. Set before auction day based on unconditional finance approval, comparable sales data, and repayment comfort. It is a hard stop, not a guideline.
  • Price guideThe price range or figure quoted by a selling agent to indicate what a property might sell for. In some states, price guides must reflect the agent's genuine estimate of selling price. In practice, guides are often set low to attract more buyer interest.
  • Price-to-income ratioThe ratio of median dwelling prices to median household income. A ratio of 8.0 means the typical home costs 8 times the typical annual household income. Used as a standard measure of housing affordability.
  • Principal and interest repaymentA loan repayment that covers both the original amount borrowed (principal) and the cost of borrowing (interest). Most home loans are structured this way. Each repayment chips away at the debt while also covering the lender’s charge.
  • Principal Place of ResidenceThe home you live in as your main residence. Most stamp duty concessions require you to move in within a specified period after settlement and live there continuously for 6 to 12 months.
  • Private treatyA method of selling property where the seller sets an asking price and negotiates directly with potential buyers, rather than selling at auction. Buyers who purchase through private treaty have a cooling-off period and more time to conduct due diligence.
  • Professional Indemnity InsuranceInsurance that protects a professional and their client if their work contains errors or omissions that cause financial loss. For building inspectors, it covers situations where a significant defect was missed during the inspection.
  • Progressive Bracket SystemA tax structure where different portions of the property value are taxed at increasing rates, similar to income tax brackets. You do not pay one flat rate on the entire purchase price.
  • Property Price CapThe maximum purchase price for a property to be eligible under a particular government scheme. Caps vary by state, location, and scheme.
  • Property SpruikerAn informal term for a person or company that promotes property investment using high-pressure sales tactics, often earning undisclosed commissions from developers or builders. Property spruikers typically offer free seminars or strategy sessions and steer clients toward specific developments where they receive kickbacks.
  • Property Value CapThe maximum value a property can be for you to remain eligible for the FHOG. This includes the land price, building contract, and any contract variations. Not all states have a cap. Caps range from $600,000 to $750,000 in states that apply them.
  • Prospect theoryA behavioural economics theory developed by Kahneman and Tversky showing that people evaluate outcomes relative to a reference point, not in absolute terms. Losses from the reference point are felt roughly twice as strongly as equivalent gains.
  • Pseudo-endowment effectA psychological phenomenon where a person develops a sense of ownership over something they do not yet own. In auctions, being the leading bidder creates a feeling that the item is already yours, which increases your willingness to pay to avoid losing it.
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