Still no transparency in the Irish property market

If insanity can be defined as doing the same thing over and over and expecting to get different results, can it be applied to the Irish property market?

A report commissioned by the then Minister for Justice, Michael McDowell SC, almost 10 years ago, in July 2004, recommended that the Irish property market should operate in “an efficient, transparent and proper manner”.

The existing legal framework for estate agents was seen as “outdated, inappropriate and inadequate” for the modern property market in Ireland. Eventually, the Property Services (Regulation) Act 2011 was enacted.

So do we now have a well-regulated and transparent property market? Much has happened since 2004. But recent jumps in prices in some areas only, coupled with uncertainty on the real direction of the market, are feeding fresh worries.

Headlines in two separate Sunday newspapers earlier this month carry a sense of déjà vu. One headline read "'Dublin sees more than €16 million in property sales over 10 days". Another stated "Housing site sold for almost twice guide price after fierce bidding war". Both fuel fears among prospective buyers of being left behind. We have been here before.

The State is best placed to obtain and publish information to inform people's decisions on buying and selling. The Property Services Regulatory Authority (PSRA), based in Navan, was established in 2007 and has been functioning under the Act since April, 2012.

Because of the importance of property to our economy, it was established at a time when other State bodies were being closed down or amalgamated.

Low in public profile since its establishment, its main job is to control and regulate estate agents, auctioneers, letting agents and managing agents of apartment blocks.

The objective is to help to achieve a balanced, fair and efficient property market. Add to this the Land and Conveyancing Law Reform Act 2009 and the Multi-Unit Developments Act, 2011 and we have a helpful legal infrastructure in place.

The PSRA was required to establish a register of residential property sales prices, a commercial leases database and a listing of all licensed estate agents. These are on the authority’s website.

The authority has also been provided with significant powers to tackle improper conduct by estate agents. There have been unconfirmed reports of action against some estate agents.

But up-to-date information can be difficult to obtain from the authority’s website. In the Latest News section, the most recent entry was posted on October 31st last year.

Information is critical in any market – none more so than in property. Among the questions put by me to the PSRA early last week were:

(i) What is the number of prosecution applications by the PSRA and the outcomes?

(ii) How many complaints have been investigated by the authority and what were their outcomes?

(iii) How many successful prosecutions for improper conduct have been made?

(iv) What new regulations has the authority recommended to the Minister for Justice and Equality?

Replies were not received. It’s possible the details will be revealed in the annual report which the authority is required by law to submit this week to the Minister for Justice and Equality, Frances Fitzgerald TD.

On a broader front, there is no shortage of Government plans, documents, strategies and policy statements on housing and the property market. They include the recent Construction 2020 Strategy, the Homeless Strategy Plan, the Housing Policy Statement of 2011 and the National Spatial Strategy 2002-2020. Add to this the authority’s annual report when it is published.

These plans and documents come from separate Government departments and bodies. Regrettably, no one Government department has over-arching responsibility for property. There should, surely, be one minister and one department responsible for planning and overseeing a market which recently almost bankrupted the State and many of its citizens.

A third critical point is that the law can only do so much. We must all take responsibility. One example: the Central Statistics Office publishes its monthly figures on residential property prices, and misleading headlines can always be expected. But it is not the CSO's fault. It always issues a health warning with its figures contained in the "Background Notes". But how many of us bother to read them?

As French writer Alphonse Karr lamented, the more things change, the more they stay the same. Despite all the changes, what has really changed here?

We still do not have a healthy, stable and transparent Irish property market. The Government could give a stronger lead.

Pat Igoe is a solicitor and author of Buying and Selling Property in Ireland: Estate Agents and the Law