‘Lack of transparency in bidding’ – Report highlights issues with Ireland’s housing sales process
The latest MyHome.ie and Bank of Ireland property report found that Ireland’s “opaque” process for buying and selling homes is deterring buyers who are confused, frustrated and in limbo, with lengthy delays often the result of the lack of transparency.
It found that two-in-five homes put on the market are being sold for 10pc or more above the original asking price and one-in-seven at 20pc above.
There were 61,000 residential properties sold in 2024.
This amounted to just 2.8pc of overall housing stock, meaning the average property is sold once every 50 years. This turnover rate was well below the UK’s turnover rate of 3.6pc.
Just 9,000 mortgages were drawn down by home movers in 2024, representing just 0.4pc of the country’s housing stock, again, less than half that seen in the UK (0.9pc).
Despite Irish homeowners emerging out of negative equity, the report said it is “striking” there has been little improvement in housing market liquidity.
The lack of transparency in the bidding process, and an emerging divergence between asking and final sold prices is being blamed by the report’s authors for the sluggish housing market.
In too many cases, asking prices are not an optimal guide
It states there is a “lack of transparency in bidding”, with gaps between asking prices and final sale prices all contributing to “poor levels of housing liquidity”.
“In too many cases asking prices are not an optimal guide for homebuyers – adding to the time and effort required to buy or sell a home,” the report found.
“This emerging divergence between asking prices and final sold prices is contributing to an unclear picture for both would-be buyers and vendors.”
Despite the UK’s property market also being depressed by a rise in interest rates, Ireland’s rate of housing turnover was “well below” the UK’s rate of 3.6pc.
The 2.8pc figure in Ireland represents a fall compared with the period of 2013 to 2022, when turnover in the Irish housing market stood at 4.2pc.
“Indeed, liquidity in the Irish housing market has lagged behind the UK in every year since the global financial crisis, seeing turnover rates even below those of Northern Ireland, which saw a similar house price collapse to ours,” the report said.
Report author and Bank of Ireland chief economist Conall Mac Coille said many of the challenges in Ireland’s housing market are “well understood”, but the “opaque” bidding process and gaps between asking and selling prices are “perhaps less appreciated”.
“These combined factors have led to poor rates of liquidity, consistently below other European countries, the United Kingdom and the United States,” he said.
“The introduction of the Property Price Register has brought welcome transparency to the Irish housing market but there is scope to go further.
“Estate agents are already required to disclose legitimate bids to the Property Services Regulatory Authority [PSRA]. Allowing prospective buyers to see these bids, via new technology platforms, can only help the functioning of the Irish housing market.”
In previous years, low turnover in Ireland’s housing market was attributed to negative equity in the wake of the crash, with a 55pc drop in house prices from their peak.
The number of mortgage approvals in Ireland in 2015 was half the equivalent level in the UK.
There has also been a broader improvement in Irish household balance sheets
However, negative equity fell to 3pc by 2018, from a peak of 40pc in 2012, while the Central Bank predicted a negative equity rate of 1pc by then end of 2021.
“There has also been a broader improvement in Irish household balance sheets,” the report noted. “Household savings have been used to pay down mortgage debt.”
“Negative equity no longer provides a credible explanation for Ireland’s low housing market turnover,” it added.
Other possible explanations for low turnover included first-time buyers acquiring a home at an older age due to the lack of housing supply, meaning they might be expected to move home less often.
“The average first-time-buyer [with mortgage debt] in 2018 was 34 years old, vs 32 in the UK. However, this hardly seems sufficient to explain far lower transaction rates amongst Irish homeowners with mortgage debt, half the UK level,” the report said.
It seems clear, according to the report, that the “inefficiencies and rigidities in Ireland’s homebuying process are most keenly felt by movers – who must sell their own home first – before they secure a new one”.
“This seems to have led to a housing market increasingly dominated by first-time buyers.”
The report recommended the adoption of fully transparent online bidding platforms, “to build trust and confidence in the property market”.
