One in seven housing purchases are completed for at least 20% above the initial asking price, while two in five close at 10% or more above the asking figure, according to a new analysis.
The widening gap between asking prices and final sale prices is one of the factors behind weak activity in the second-hand homes market, reports RTE.
The report, conducted by property website MyHome.ie with Bank of Ireland, said this pattern is creating “an unclear picture for both would-be buyers and vendors”.
It stated that in many cases “asking prices are not an optimal guide for homebuyers, adding to the time and effort required to buy or sell a home”, reports RTE.
The study noted that this issue is contributing to sluggish liquidity in the existing homes market, “with the average property being sold once every 50 years”.
It added that the rate at which homeowners with mortgages are moving house is now less than half of the equivalent rate in the UK, reports RTE.
The research found that “Ireland’s opaque process of buying and selling homes is contributing to current poor levels of housing liquidity”.
It said that “a lack of transparency in bidding, along with an emerging divergence between the asking price and final sold price of properties, are amongst 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”, reports RTE.
It recommends that estate agents continue to promote and use new online transparent bidding systems, “as they can provide greater trust and confidence in the housing market”.
According to the study, 61,000 residential property transactions took place in Ireland in 2024, equal to 2.8% of all homes, reports RTE.
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“This turnover rate was well below the UK’s turnover 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.”
The research stated that activity in the Irish 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”, reports RTE.
It found that the problem is especially significant for current homeowners with mortgages who want to move house.
“Just 9,000 mortgages were drawn down by movers in 2024; this represents just 0.4% of our housing stock, which is less than half the UK rate of 0.9%.”
Bank of Ireland’s Chief Economist said that although Ireland’s supply of homes has not matched strong demand, many of the underlying difficulties are well known, reports RTE.
Conall Mac Coille, the report’s author, said that “perhaps less appreciated is the process of buying and selling existing homes is also impeded by an opaque bidding process and the emerging discrepancy between asking prices and final sold prices”.
“These combined factors have led to poor rates of liquidity, consistently below other European countries, the United Kingdom and the United States.”, reports RTE.
Mr Mac Coille said 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 PRSA. Allowing prospective buyers to see these bids, via new technology platforms, can only help the functioning of the Irish housing market,” he added, reports RTE.
The Managing Director of MyHome said that a fully transparent bidding system “may improve market functionality and, by extension, help to improve housing liquidity.”
Joanne Geary said that currently nearly half of property sales take place on platforms that use online bidding or auctions, including MyHome Offers, reports RTE.
“A key advantage of these platforms is that they provide buyers with transparent information about the bidding history of the properties they are interested in, as well as giving the buyer the digital means to view and place an offer at any time.”, reports RTE.
The report also highlighted a recent Competition and Consumer Protection Commission survey which found that only 16% of buyers believe the housing market is transparent.
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