How Lack of Transparency in Home Buying and Selling Hurts Housing Supply
A recent report highlights how the lack of transparency in home buying and selling in Ireland negatively impacts housing supply. Conducted by MyHome in partnership with Bank of Ireland, the study reveals that opaque bidding practices and a widening gap between asking and final sale prices hinder market liquidity.
The State of the Housing Market
In 2024, Ireland reported 61,000 residential property transactions, accounting for only 2.8% of the housing stock. This figure significantly trails behind the UK’s turnover rate of 3.6%. The continuous decline in market liquidity has been evident since the global financial crisis, with Ireland often having lower turnover rates than Northern Ireland.
Challenges for Homeowners and Buyers
- Only 9,000 mortgages were approved for movers in 2024, representing just 0.4% of the housing stock.
- This is less than half the UK’s rate of 0.9% for the same period.
- Nearly 14% of transactions occur at least 20% above the asking price, creating uncertainty for buyers.
Joanne Geary, Managing Director of MyHome, suggests that implementing transparent bidding processes could improve market conditions. Many buyers are currently disheartened by the lack of clarity in the bidding landscape.
Recommendations for Improvement
The report advocates for the adoption of online transparent bidding platforms to foster trust and efficiency in the housing market. Such platforms allow potential buyers to view bidding histories and place offers conveniently. Established systems like the Property Price Register have enhanced transparency, but further measures are necessary.
Public Perception of Transparency
A CCPC survey revealed that only 16% of buyers perceive the housing market as transparent. This lack of clarity places homebuyers at risk of inadequate information during critical phases of the home-buying process.
Conall MacCoille, Chief Economist at Bank of Ireland, notes that while demand for housing remains robust, the opaque nature of the existing home selling process exacerbates supply issues. Enhancements in transparency are integral to improving functionality in the Irish housing sector.
Conclusion
Without addressing the transparency in bidding and other related issues, the Irish housing market will continue to struggle with low liquidity. Addressing these concerns is essential for restoring trust and market efficiency, ultimately benefiting both buyers and sellers.
