Legally speaking, if the auctioneers announces reserve is met then the house will sell. But it has nothing to do with whether the reserve is signed in concrete. They may sign they may not have signed. It won't matter to the auctioneer, his job it to hold the auction.
From Aussie auction programs I have seen, what they usually seem to do is once they reach a ceiling of what a buyer is prepared to pay, they say that they will now go and discuss it with the vendor. Then they will come out and restart the auction and will say if it is now on the market, or they may put in a higher vendor bid. If I was selling at auction, that is the way I would want it handled, but I do wonder if they do that in Auckland with all the multiple auctions they run in their offices. I have been to quite a few house auctions in Wellington, but never actually seen a house actually sell at auction in Wellington. They seem to negotiate afterwards and then sell.