Lack of transparency sowing mistrust in property agents, report finds
A recent survey by the Competition and Consumer Protection Commission found that just 16% of buyers feel the housing market is transparent, and that homebuyers are at risk of inadequate information during the pre-sale-agreed period and conveyancing stage. Picture: Colin Keegan/Collins
A lack of transparency in the home-buying process is leaving house hunters suspicious of estate agents and often paying more than 20% over the original asking price.
A new report, which analyses the process of buying a home in Ireland, has found that buyers often feel they are competing against illegitimate bidders, driving up the final price.
The report found that one in seven homes are sold at 20% above the asking price while one in five go for 10% above asking, a situation that does not occur in other countries.
The analysis from online property portal MyHome, in association with Bank of Ireland, also raised concerns that the average Irish home is sold just once every 50 years.
It found that a lack of transparency in bidding, along with a major divergence between the asking price and final sold price of properties, are among a range of inter-related issues that have led to the liquidity in the Irish housing market falling behind European countries, the UK, and US.
The report's author, Bank of Ireland chief economist Conal MacCoille, said that in other countries, such as the UK, asking prices are closely linked to sale prices, but in Ireland's system that does not occur.
"In the UK, both during buoyant and depressed housing market conditions, the transaction price is typically settled at a small discount to the original asking price. This means asking prices serve as a better guide to affordability," Mr MacCoille said.
"Opaque bidding processes may also lie behind homebuyers’ dissatisfaction. There may be a perception, valid or not, that not all bids are legitimate, making buyers feel that they may be ’bidding against themselves’.
"Homebuyers may suspect, rightly or wrongly, the information they receive from an estate agent is not entirely accurate, incomplete, or self-serving."
The report recommends that estate agents continue to adopt and encourage the use of online transparent bidding platforms, as they can provide greater trust and confidence in the housing market.
A recent survey by the Competition and Consumer Protection Commission found that just 16% of buyers feel the housing market is transparent, and that homebuyers are at risk of inadequate information during the pre-sale-agreed period and conveyancing stage.
In November 2023, then Taoiseach Leo Varadkar said that he wanted to see a new "closed" system like that in place in Scotland, where the seller will ask for offers over or around a minimum price, a deadline is set and a sealed bid is submitted via a solicitor before this deadline.
“Everyone puts in their bid once and then the highest bidder gets the house,” Mr Varadkar said.
In response to that idea, then-Housing Minister Darragh O'Brien said that a stakeholder group was to be established in early 2024.
The calls for reform came after homebuyers in Co Meath were asked to pay an extra €60,000 for their homes by a developer who claimed financial difficulties.
Mr MacCoille said the system needs to be more transparent.
“Estate agents are already required to disclose legitimate bids to the Property Services Regulatory Authority.
According to the report, there were 61,000 residential property market transactions in Ireland in 2024, equivalent to 2.8% of the housing stock.
This turnover rate is well below the UK’s rate of 3.6%, itself depressed by rising interest rates and well down from the 4.2% rate on average it experienced through 2013-2022.
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