The process of buying a home in Ireland often results in overbidding and stressful delays, according to a new study by the Economic and Social Research Institute (ESRI). The research found that common bidding practices and gaps in buyers’ knowledge of their rights contribute to inflated prices and complications in the property market.
The ESRI’s Behavioural Economics Unit conducted a nationally representative survey of 800 adults and complemented it with a detailed survey of buyers’ and sellers’ experiences. The study also included a controlled auction experiment to examine how different bidding methods influence buyer behaviour. Funding for the research came from the State’s Competition and Consumer Protection Commission (CCPC).
The findings show that half of buyers believed a visible online bidding system would be fairer, yet it led to higher prices than any other method. Participants in open auctions were more likely to exceed their original budget and pay more than they initially considered the property worth.
“The findings show that people are navigating a system they may not fully understand and increasingly experiencing stress, especially delays to conveyancing,” said Dr. Deirdre Robertson, Senior Research Officer at the ESRI. She told RTÉ’s Morning Ireland that “auction fever” may explain the overbidding. “Every time somebody reaches the top and is outbid, it’s like a mini loss, which drives them to bid more. Behavioural science shows that losses hit harder than gains, which helps explain why these auctions push prices up.”
The study also revealed significant gaps in knowledge of buyers’ and sellers’ rights. While more than two-thirds of respondents knew it was illegal for sellers to accept multiple deposits on the same property, only one in five knew that agents could legally continue marketing a home after it goes “sale agreed.” Many were also unaware that a buyer can pull out of a sale without penalty before contracts are signed.
Stress was a common theme for both buyers and sellers. Among those who had purchased a property, 63% reported experiencing at least one stressful hurdle, rising to 80% for buyers in the past three years. Delays were the most frequent issue: one-third of second-hand buyers reported conveyancing delays, and over a quarter of new-build buyers faced delays moving into their homes. Other challenges included unexpected additional costs, finding issues with the property after purchase, and sellers pulling out of deals. Conveyancing delays were also the most common stressor for sellers.
The ESRI said the findings highlight the need for greater transparency in property transactions and better guidance for buyers navigating the market. The research suggests that auction systems, while popular, may be unintentionally inflating prices and adding to the strain for households purchasing a home.
