Why Irish Buyers Overpay ... And What the Research Says

A few years ago, I was looking to buy a home in Dublin. I kept showing up to viewings, making bids I thought were reasonable, and losing. Not by a little. By 10%, sometimes 15% above what the estate agent had listed it for. Later that year MyHome.ie published a report reflecting what I had experienced in numbers: MyHome.ie’s Q4 2024 report found that “a remarkable 40% were sold at a premium exceeding 10% of the asking price”, with one in seven homes sold at more than 20% above listed.

The problem wasn’t that I was being irrational. The problem was that I had no independent anchor. I didn’t know what comparable homes in the area had actually sold for. I had no way to tell whether the price I was bidding was close to fair value, or whether I was being pulled into a spiral that had long since disconnected from it. In that gap, between what buyers know and what they’d need to know to make a well-informed decision, a lot of money gets lost. And that’s not an accident.

That experience is what led me to build HomeIndex, a home valuation tool to help keep my bids level headed. The phenomenon I was experiencing is not something new. The more I dug into the research, the more I realised the problem had a name, information asymmetry, and it punishes those who aren’t informed.

Listing Prices Are Dishonest

In Ireland, a common selling strategy is to list a property significantly below its expected sale price, sometimes 10–15% below. The logic is simple: a lower asking price generates more viewings, more competing buyers, and a more heated bidding process that drives the final price higher than a realistic listing ever would. Sellers, and the agents who advise them, know exactly what they’re doing.

This means asking prices are not a reliable signal of true market value. Daft.ie’s Q1 2026 Sales Report tracks what it calls “market heat” defined as “the typical gap between initial listed price and final transaction price” and puts it at 5.8% nationally in early 2026. In Munster it sits at 7.2%, and in Dublin at 6.9%.

To be clear: that gap doesn’t prove buyers overpaid relative to true value. It proves the asking price was never meant to reflect true value in the first place. The listed price is a marketing device. And when buyers treat it as a starting reference, which most do, because what else is there?

A Housing Shortage Makes Everything Worse

Ireland’s chronic undersupply of housing turns this information problem into something more acute. When demand consistently outstrips supply, the emotional stakes of any individual bid are enormous. Buyers aren’t just weighing up whether a price is fair. They’re calculating whether they can afford to lose this one and wait for the next. In a market where suitable properties are rare and competition is fierce, the rational response to uncertainty is often to bid higher just to stay in the game. The shortage doesn’t create the information problem, but it amplifies every consequence of it.

Auction Fever: Why the Bidding Format Itself Is Dangerous

The bidding process used in Ireland is called open bidding, meaning bids are visible. When you make an offer, the estate agent tells other interested parties, who can then respond with a higher bid. You can then respond again. And so on. There is no deadline, no sealed envelope, no single moment of decision. Just a rolling, open-ended competition where you always know the current highest bid and are invited to beat it.

This is fundamentally different from, say, a sealed-bid system, where every buyer independently submits their best offer without knowing what anyone else has bid. In a sealed-bid process, a given bid is your own honest assessment of what the property is worth to you. In open bidding, every bid is a reaction to the most recent bid, every increment feels like a small, reasonable step rather than a large, considered commitment.

A February 2026 study by the ESRI, commissioned by the Competition and Consumer Protection Commission (CCPC), examined this directly. Using a nationally representative survey and controlled auction experiments, it found that participants in open auctions “were more likely both to exceed their original budget and to bid higher than their view of what the property was worth.” The lead researcher, Dr. Deirdre Robertson, concluded: “the most commonly used bidding systems encourage people to overbid, inflating prices.”

The open bidding format produced higher prices than any other format tested. The sealed-bid format produced the lowest. The difference isn’t the buyers, it’s the structure. Open bidding is not a neutral mechanism. It is a pressure system, and in a market with a housing shortage feeding urgency into every decision, that pressure is relentless.

The agent who should be on your side may not actually be

There is a third layer to this problem that rarely gets discussed openly. One would assume the estate agent representing the seller has their best interest at heart … both parties want to sell the property, right? But research suggests the agent may not even be acting fully in the seller’s interest.

Economists Steven Levitt and Chad Syverson studied this directly in a 2008 paper published in the Review of Economics and Statistics. They compared home sales where real estate agents were selling on behalf of clients to sales where agents were selling their own homes. The finding was striking: agents selling their own properties achieved 3.7% more and kept their homes on the market 9.5 days longer than when selling for clients, even after controlling for property characteristics.

The explanation is straightforward. An agent earns a small percentage of the sale price, so the financial benefit of holding out for a higher offer is marginal to them but significant to you. Getting a deal done quickly is worth more to their business than squeezing out an extra €20,000 for a client. The incentive is to close, not to maximise. Buyers navigating this market are not just uninformed. They are often being guided by people whose interests are subtly misaligned with their own. The study is US-based, but the incentive structure is identical in Ireland.

What the Research Shows About Uninformed Buyers

The Irish situation is extreme, but the underlying pattern, uninformed buyers paying more than informed buyers for equivalent properties is documented across multiple markets. A 2022 review of the academic literature concluded bluntly: “the conventional wisdom in the market, that nonlocals overpay, is now a stylized fact in the literature.”

When examining adjacent markets in the US, the numbers behind that conclusion are striking. Lambson et al. (2004) found that out-of-state buyers paid an average premium of 5.5% for apartment complexes in Phoenix compared to in-state buyers. A study of office transactions across 138 US markets found that nonlocal investors paid a 13.8% premium at purchase and then sold at a 7% discount. Ling et al. (2018), examining 115,000 commercial property sales across the 15 largest US metros, found nonlocal buyers paid an average premium of 4–15%. The pattern is consistent: the less you know about a local market, the more you pay to enter it.

Why Independent Data Is the Missing Piece

In Ireland, the raw material for good price information exists. The Property Price Register is a public record of every residential sale. The problem is that it’s hard to use in practice: it doesn’t tell you which sales are comparable to the property you’re looking at, it doesn’t account for the 3–12 month lag between when a sale closes and when it appears in the register, and it doesn’t translate raw data into a range that reflects genuine uncertainty.

Without an independent reference point, buyers are left choosing between the asking price (a marketing tool), the estate agent’s guidance (they earn commission on a completed sale, not a fair one), or gut feel. None of these are substitutes for knowing what comparable homes nearby have actually sold for, adjusted for where the market is today.

That’s the information gap that makes expensive misjudgements so easy to make in Ireland. And it’s the gap that the right tools can close.

HomeIndex provides instant property valuations for any residential address in Ireland, using market-adjusted comparable sales data. Try it here.

References

• Robertson, D. et al. (2026). Homebuying in Ireland: Characterised by Overbidding, Misperceptions and Delays. ESRI / CCPC. esri.ie
• Daft.ie (2026). Q1 2026 Sales Report. daft.ie
• MyHome.ie / Bank of Ireland (2024). Q4 2024 Property Report. myhome.ie
• Nakajima, M. et al. (2022). Information Frictions in Real Estate Markets: Recent Evidence and Issues. PMC
• Kurlat, P. & Stroebel, J. (2015). Testing for Information Asymmetries in Real Estate Markets. Review of Financial Studies. NBER w19875
• Chinco, A. & Mayer, C. (2016). Misinformed Speculators and Mispricing in the Housing Market. Review of Financial Studies. NBER w19817
• Levitt, S. & Syverson, C. (2008). Market Distortions When Agents Are Better Informed. Review of Economics and Statistics. NBER w11053
• Eerola, E. & Lyytikainen, T. (2015). On the role of public price information in housing markets. Cited in PMC 2022.
• Ben-Shahar, D. & Golan, R. (2019). Information disclosure and price dispersion. Cited in PMC 2022.