A Brisbane home listed as having no reserve has failed to sell at auction in a bizarre turn of events now under investigation by the Office of Fair Trading.

Bidders and spectators were left shocked after the house in Rosebery Terrace, Chelmer, passed in despite bids reaching $640,000.

Johnston Dixon Quality Property CEO John Johnston was the auctioneer, agent and owner of the property, and had repeatedly advertised the home as having no reserve.

“If the highest bid is $60,000, that’s what it’ll sell for. I’m hoping that’s not the case but we’re locked in to sell here. Make no mistake: the house will be sold on Saturday,” he told Domain prior to Saturday’s auction.

But the home did not sell.

According to sources at the auction, bidding reached $640,000 before Mr Johnson told the crowd he had received an offer of $715,000, which was subject to the owner’s [his] approval.

A confused crowd left it at that with no further bids, and the property, which was supposed to sell, passed in.

“I was shocked to even find out the agent was the owner as well, no one at the auction had any idea,” said one spectator, who did not want to be named.

According to those present, Mr Johnston had said there was a vested interest between the property and the agency, but did not state his ownership of the property.

“Once the bids got to $640,000 there was huge stalling, and then after a while he [Mr Johnston] told everyone there was another bid of $715,000 from a family trust that would be processed on Monday if there were no other bids,” the spectator said.

“It was very misleading; definitely not what I expected from a no reserve auction.”

But the next day the house was back online for advertising; this time with a sale price of $725,000.

And to add to the mounting confusion, the house price dropped on Monday to offers over $700,000.

A spokesperson for the Office of Fair Trading said they have begun making inquiries into the matter and urged anyone unsatisfied to lodge a complaint.

Real Estate Institute of Queensland chief executive officer Antonia Mercorella said there could be potential consequences for the agent if found to be deceiving buyers.

“If a property has been marketed as ‘no reserve, must be sold’ and then that status is changed once the auction is underway, that might be misleading to potential buyers,” Ms Mercorella said.

“Vendors need to be careful when making a representation like this which is seemingly designed to attract a crowd only to have the property pass in.

“This may amount to misrepresentation and/or constitute misleading and/or deceptive conduct.”

The auction only attracted about 30 people and a small amount of registered bidders, despite listed as a no reserve auction and considerable national exposure.

Mr Johnston bought the property in 2006 for $506,000. He has been trying to sell it for over a year.

After several unreturned phone calls and messages left with his office, Mr Johnston hung up when contacted by Domain.