The extent of any State’s responsibilities to its citizens is a hotly contested issue. But it is safe to say that the Republic is, relatively speaking, pretty far down the road to nanny statehood; the derogatory description for countries that accept responsibility for the physical and emotional welfare of their citizens, as well as the usual stuff like law and order.
A new report from the Economic and Social Research Institute (ESRI) would seem to imply that this paternalism should now be extended to making house buying less stressful. To be more precise, they argue that removing stressors would result in a better outcome in terms of pricing.
Opponents of the nanny state – think Jeremy Clarkson fans of a certain age – will no doubt be reaching for the blood pressure tablets at the thought of the further infantilisation of citizens by the Government.
[ Ireland’s bidding system for homes ‘driving prices higher’Opens in new window ]
They sort of have a point. Some things in life are stressful by their very nature and large financial transactions are one of them. However, the reward is substantial and most of us can make the trade-off between risk and reward. After all, 300,000 years of evolution have made our species reasonably good at it, hence our domination of the planet
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But even the most dreadful of golf club bores would find it hard to argue that the State doesn’t have an obligation to ensure a fair market in houses.
The most significant finding in the ESRI study – from this perspective – is that 14 per cent of people who took part in their survey felt they had been the subject of so-called ghost bids when bidding on a property. Even more interesting is that a third of people looking to buy a house told the ESRI that they expected they would be the subject of ghost bidding – this is where fake bids are made to drive up the price by the seller or their agent.
No bidding process can function efficiently – for buyer and seller – if one-third of the participants think they are being cheated. And there is a clear imperative for a Government presiding over a decade-long housing shortage to ensure that the market for what houses are available for sale functions properly.
In the first instance, the job of rooting out ghost bidding falls to the Property Services Regulatory Authority (PSRA), which was set up in 2012 to license and regulate estate agents and other providers of property services.
Making or facilitating ghost bids clearly violates the PSRA code of conduct, which requires that property service providers act honestly in their dealings. Specifically, it says they should “not infer or create false or misleading records of offers”. It is also clear that the integrity provisions put an onus on them to establish the bona fides of someone bidding for a property.
According to the PSRA, of the 24 complaints it received about bidding in 2024 – the last year for which it has published figures – only one made allegations relating to ghost bidding.
The authority says it wrote to the agent in question and requested the records associated with the bids. (Agents are required to keep records for at least six years). Having got the information it sought, the PSRA declined to investigate “as no improper conduct as defined in section 2 of the Act occurred”.
The PSRA says it has only investigated one agent in the last three years in relation to a complaint about bids and on that occasion “improper conduct under section 61 of the Act (failure to have a record of bids) was found”. The agent received a warning.
In addition to investigating complaints, the PSRA also carries out compliance checks on licensee holders. As part of the process, it reviews sample files for the sale of properties, including records of bids. It has the power to “further verify the bids” if any discrepancies come to light. In 2024, it audited 375 of the 6,000-odd licence holders on its books and didn’t find any infractions.
It has to be remembered that auditors are watchdogs, not bloodhounds. They don’t go looking for problems. That said, the PSRA’s figures have to be taken at face value and “nothing to see here” would appear to be the conclusion on ghost bids.
But the problem is that perception has trumped reality (as defined by the PSRA figures) when it comes to ghost bidding. It’s a very big problem when one out of every three potential buyers in a stressed market thinks they are going to be ripped off.
It’s not a great look for the property industry either, but its image problem is not exactly news. Still, there is nothing to stop them from taking steps to demonstrate to buyers the integrity of their bidding processes.
The Government, however, doesn’t have that luxury. It must reassure people that the bidding process is credible. A more muscular approach by the PSRA might be a start.
