Irish Homebuyers Face ‘Auction Fever’ and Rising Stress Levels
The Irish housing market is increasingly characterized by overbidding, delays, and a lack of understanding among buyers and sellers, according to new research from the Economic and Social Research Institute (ESRI). The study, funded by the Competition and Consumer Protection Commission, reveals a system where many are navigating unfamiliar territory, leading to inflated prices and significant stress.
The Overbidding Phenomenon: Why Are Prices Being Driven Up?
The ESRI’s research highlights a worrying trend: buyers are frequently exceeding their initial budgets, particularly in auction settings. Participants in open auctions were more likely to bid higher than they initially thought a property was worth. Surprisingly, even the introduction of a visible online bidding system – intended to promote fairness – actually resulted in more inflated prices than other processes. This “auction fever,” as described in recent reports, is pushing first-time buyers to overbid, creating a challenging landscape for those entering the property market.
Pro Tip: Before entering an auction, establish a firm upper limit and stick to it. Emotional bidding can quickly lead to overspending.
Delays and Legal Uncertainties: A Stressful Process
Beyond inflated prices, the home-buying process in Ireland is plagued by delays. The study found that 63% of previous buyers experienced at least one stressful hurdle, rising to 80% for those who purchased in the last three years. Common issues include delays in conveyancing (both for second-hand and new builds), unexpected issues discovered after the sale, and sellers withdrawing from agreements.
A significant knowledge gap similarly exists regarding legal rights and responsibilities. While most buyers know it’s illegal for a seller to accept multiple deposits, only one in five are aware that agents can legally continue marketing a property even after it’s “sale agreed.” many are unaware that buyers can withdraw from a sale without penalty before contracts are signed.
The Impact of Conveyancing Delays
Conveyancing delays are a particularly prominent source of stress for both buyers and sellers. One-third of second-hand buyers and over a quarter of new build purchasers experienced hold-ups in this process. These delays contribute to uncertainty and can disrupt moving plans, adding to the overall strain of purchasing a home.
What Does the Future Hold? Potential Trends
The ESRI’s findings suggest several potential future trends in the Irish housing market. Increased regulation regarding transparency in bidding processes may be necessary to curb overbidding. Greater emphasis on educating buyers and sellers about their legal rights and responsibilities is also crucial. We may also notice a rise in demand for services that simplify the conveyancing process and provide greater clarity on timelines.
Did you know? The ESRI research involved a nationally representative survey of 800 adults who participated in a controlled auction experiment, providing robust data on bidding behavior.
FAQ
Q: Is it illegal for a seller to accept multiple deposits?
A: Yes, it is illegal for a seller to accept multiple deposits for the same property.
Q: Can a real estate agent continue to market a property after it goes “sale agreed”?
A: Yes, agents can legally continue to market a property even after it’s “sale agreed.”
Q: Can a buyer pull out of a sale without penalty?
A: Yes, a buyer can pull out of a sale without penalty before contracts are signed.
Q: What is the biggest source of stress for homebuyers in Ireland?
A: Delays, particularly in conveyancing, are the most common stressful problem for buyers.
Want to learn more about navigating the Irish property market? Explore our other articles on home buying and selling.
