Author: Liam Hogan

ESRI Study Finds Home‑Buying Process Fuels Overbidding and Stress for Buyers

A new study from the Economic and Social Research Institute (ESRI) has found that Ireland’s current home‑buying process is contributing to inflated prices, significant delays, and rising stress levels among purchasers. The research, funded by the Competition and Consumer Protection Commission (CCPC), highlights widespread misunderstandings about buyer and seller rights as well as the impact of auction-style bidding on final sale prices.

Auction Systems Driving Higher Prices

The ESRI’s Behavioural Economics Unit conducted a controlled auction experiment with 800 adults and found that open and online bidding systems—while perceived as more transparent—actually led to higher levels of overbidding. Many participants exceeded their original budgets and even bid above what they believed the property was worth.

Researchers attribute this behaviour to “auction fever,” where competitive pressure and loss aversion push bidders to escalate their offers. Each time a bidder is outbid, it can feel like a small loss, motivating them to continue raising their bid.

Gaps in Public Understanding

The study also uncovered significant gaps in public knowledge about the legalities of the home‑buying process:

• Only one in five people knew that estate agents can continue to market a property even after it goes “sale agreed.”
• Most buyers were unaware that they can withdraw from a purchase without penalty before contracts are signed.
• While two‑thirds of respondents understood that sellers cannot accept multiple deposits for the same property, many remained unclear about other key rights and responsibilities.

Delays a Major Source of Stress

Delays emerged as the most common and stressful issue for both buyers and sellers.

Among those who had purchased a home:

• 63% experienced at least one major hurdle.
• This figure rose to 80% for buyers who purchased within the last three years.
• One‑third of second‑hand buyers reported conveyancing delays.
• More than a quarter of new‑build buyers faced delays moving in.

Other challenges included unexpected additional costs, sellers pulling out of deals, and discovering issues with the property after the sale.

Call for Reform

Dr Deirdre Robertson, Senior Research Officer at the ESRI, said the findings show that buyers are navigating a system they “may not fully understand,” with delays and bidding practices contributing to unnecessary stress and inflated prices. She noted that the most commonly used bidding systems “encourage people to overbid,” suggesting that reforms may be needed to create a fairer and more efficient process.

Minister to announce call for housing infrastructure projects

Investment to Activate 300,000 Homes

From: Department of Housing, Local Government and Heritage

Minister for Housing James Browne is expected to announce the first call for projects under the Government’s new Housing Infrastructure Investment Fund this week. The €1 billion fund is designed to open up housing sites nationwide by supporting infrastructure works that remove barriers to construction. Projects selected for funding will be required to progress rapidly. Local councils and the Land Development Agency will be invited to submit proposals in the coming days.

On the 13^th November last year, just 2 months ago, the Irish Government announced the launch of the Housing Infrastructure Investment Fund, an ambitious programme designed to create the production of 300,000 new homes. It announced over €102m as part of National Development Plan for critical infrastructure.

But other key investment allocations include:

• €3.5 billion in equity earmarked for energy projects with ESB Networks and Eirgrid
• €12.2 billion secured for water and wastewater services
• €24.3 billion for the transport sector including low carbon transport projects such as Metrolink.
• €20 billion to support the delivery of new social and affordable homes over the lifetime of this plan.
• A further €2.5 billion for the LDA to deliver more homes across the country.
• A projected €2 billion investment by Housing Finance Agency in 2026
• A new €1 billion Infrastructure Investment Fund – to support the work of the new Housing Activation Office.
• An additional €500 million for the URDF, to support regeneration and rejuvenation projects.
• A new ISIF €400 million equity risk capital investment programme over the next three years to expand equity funding available.
• An additional €200 million committed to Home Building Finance Ireland
• €100 million capital funding in 2026 for the acquisition of second-hand properties to support the exit of families longest in homeless emergency accommodation.
• €563 million to support homelessness services in 2026
• An expanded and streamlined Land Acquisition Fund, increased to €500 million for local authorities and AHBs.

As the Irish property market faces evolving dynamics, developers preparing for 2026 will have to navigate some serious hurdles. From rising construction costs to tightening regulations, the path ahead may be challenging. Key concerns include:

Rising Construction Costs

Material shortages, supply chain disruptions, and inflation continue to drive up building costs, making it harder for developers to deliver projects on budget and on time. These rising costs will likely impact both the affordability and availability of new housing.

Stringent Planning Regulations

Tighter planning restrictions and environmental regulations are expected to intensify, with stricter sustainability and energy efficiency requirements for new developments. While essential for long-term environmental goals, these regulations could slow down the development process and increase costs.

Demand vs. Supply

Despite ongoing demand for housing, especially in urban areas, supply is struggling to keep up. As developers face rising costs and stricter regulations, the gap between demand and supply may widen further, potentially exacerbating the housing crisis.

Financing Challenges

Interest rate hikes and a more cautious investment environment could make it harder for developers to secure financing, especially for large-scale residential projects. Developers may find it difficult to balance rising borrowing costs with profitability.

Increased Competition

With institutional investors and large-scale developers dominating the market, smaller developers may find it harder to compete. The ongoing pressure on profit margins could push out smaller players, leaving a more concentrated development landscape.

Sustainability & Green Building Standards

The need for energy-efficient buildings and green technology will continue to grow. While these investments are important for future-proofing properties, the initial costs of sustainable building practices may deter some developers.

In conclusion, property developers in the Irish residential market in 2026 will face an uphill battle to meet demand, manage costs, and navigate evolving regulations. The key to success will be adaptability, strategic planning, and staying ahead of the curve on sustainability.

As we move through 2025, the Irish real estate market is continuing to evolve. Here’s a snapshot of what’s shaping both the residential and commercial sectors:

Residential Market:

High Demand Meets Limited Supply.

Despite efforts to boost construction, the demand for both homes and rental properties remains high, especially in urban centres like Dublin, Cork, Limerick, Waterford and Galway. The shortage of affordable housing continues to be a challenge, keeping prices above pre-pandemic levels.

Prices Stay Strong, But Slowing Growth.

While the Irish property market saw a dramatic surge over the past few years, 2025 is showing signs of a more balanced growth. Prices are still climbing, but at a slower pace, as buyers and investors are becoming more cautious due to rising interest rates and inflationary pressures.

First-Time Buyers Still Struggling.

Getting onto the property ladder is tough for many, with affordability being a major barrier. Government initiatives like the Help-to-Buy scheme are helping, but more needs to be done to make homeownership a realistic goal for younger buyers.

Sustainability & Eco-Friendly Homes on the Rise.

There’s a clear shift towards sustainability, with eco-friendly homes and green building practices gaining traction. Whether it’s energy-efficient designs or homes built with sustainable materials, buyers are becoming more conscious of their environmental impact.

Rental Market Tightens.

The rental market remains extremely competitive, with rents continuing to rise, especially in major cities. With fewer properties available and increased demand, many renters are finding it difficult to secure affordable housing.

Commercial Market:

Post-Pandemic Recovery.

The commercial property sector in Ireland is showing strong signs of recovery in 2025. Office space, retail, and industrial properties are seeing increased demand as businesses adjust to hybrid work models and supply chain needs.

Office Space Adaptation.

With many companies still embracing hybrid or remote work, the demand for traditional office space has softened. However, there’s a growing interest in flexible, co-working spaces as businesses seek to provide employees with options that suit a more hybrid workforce.

Retail Challenges and Opportunities.

The retail sector is in a state of transformation. While e-commerce continues to grow, many retail brands are doubling down on the in-store experience, leading to a resurgence in demand for high-quality retail spaces in prime locations. It’s not all doom and gloom—brick-and-mortar stores that offer unique experiences are seeing a resurgence.

Industrial Growth Continues.

The industrial and logistics sector remains one of the strongest performers in Ireland’s commercial property market. With the rise of e-commerce and demand for efficient supply chain management, warehouses and distribution centres are in high demand, particularly along key transport routes.

Sustainability Takes Centre Stage in Commercial Spaces.

Sustainability is also a top priority in the commercial sector, with companies focusing on energy-efficient buildings, green certifications, and renewable energy sources. Landlords and developers are increasingly incorporating sustainable features to meet both legal requirements and tenant demand.

Investment Activity Grows

Despite global economic uncertainty, Ireland remains an attractive market for commercial property investors. With stable returns, low vacancy rates in key sectors, and a strong demand for prime locations, commercial real estate is still seen as a solid investment option.

Looking Ahead:

The outlook for Ireland’s real estate market in 2026 shows steady but cautious growth. The residential sector faces challenges in terms of affordability and supply, while the commercial sector is finding new opportunities in adapting to hybrid work, e-commerce growth, and sustainability initiatives.