Report reveals transparency issues impacting Ireland’s housing sales process

The real estate landscape in Ireland faces significant challenges, as highlighted in a recent report by MyHome.ie and Bank of Ireland. This report emphasizes the transparency issues impacting the housing sales process, which deter potential buyers and contribute to market stagnation.

Opaque Bidding Process Affects Buyer Confidence

According to the report, many buyers feel confused and frustrated by the current property buying and selling mechanisms. Approximately two out of five homes are selling for 10% or more above their original asking prices, and one in seven homes achieve sales at 20% above their initial listings.

Current Market Statistics

• In 2024, around 61,000 residential properties were sold, representing only 2.8% of the total housing stock.
• This equates to an average property selling once every 50 years.
• In contrast, the turnover rate in the UK is 3.6%.
• Only 9,000 mortgages were issued to home movers, a mere 0.4% of the country’s housing stock, significantly lower than the UK’s 0.9%.

Even with improvements in household equity, the report indicates minimal change in market liquidity.

Impact of Asking Prices and Market Liquidity

The inconsistency between asking prices and actual sale prices creates a lack of clarity for buyers and sellers. The report highlights that asking prices often do not accurately reflect market conditions, leading to prolonged selling times and buyer uncertainty.

“In too many cases, asking prices are not an optimal guide for homebuyers, adding to the time and effort required to complete a transaction,” the report states. This divergence in prices contributes to inadequate housing market liquidity.

Comparative Insights with the UK Housing Market

Despite facing its own challenges, the UK property market exhibits higher turnover rates compared to Ireland. The turnover rate in Ireland has decreased from 4.2% between 2013 and 2022 to the current low of 2.8%.

Year after year, Irish housing market liquidity lags behind the UK and even Northern Ireland, which experienced a similar decline in house prices during the recent financial crisis.

Expert Insights on the Current Situation

Conall Mac Coille, Chief Economist at Bank of Ireland, pointed out that the bidding process’s opacity and the wide gaps between asking and selling prices are critical obstacles. He noted that while improvements such as the introduction of the Property Price Register have enhanced transparency, more action is needed.

“The adoption of fully transparent online bidding platforms could significantly improve trust and confidence in the property market,” Mac Coille suggested. This could allow buyers to see legitimate bids and better navigate the market.

Long-Term Trends and Market Dynamics

Historically, low turnover in the Irish market was linked to negative equity. Although negative equity has dropped dramatically—from a peak of 40% in 2012 to just 3% by 2018—market performance remains stagnant. The Central Bank anticipated that by the end of 2021, only 1% of homeowners would be in negative equity.

Other factors contributing to low market activity include an older average age for first-time buyers—34 years for those carrying mortgage debt in 2018 compared to 32 in the UK—making them less likely to move frequently.

Overall, inefficiencies within the homebuying process disproportionately affect those looking to sell their properties first to buy a new one. As a result, the market is increasingly dominated by first-time buyers.

To encourage movement within the market, experts are advocating for changes that enhance transparency and reduce barriers to buying and selling.