WOULD INVESTORS buy shares in a stock market where transaction prices are known only to the buyer and seller, but not to other investors? Of course not. Investors would shun any stock market that lacked full price transparency. Nevertheless, that is how the domestic property market operates where the failure to publish sale prices for houses risks creating a false market, given the lack of reliable information available to buyers and sellers.
In Ireland, most house sales are not conducted by public auction but by private treaty. When houses are bought and sold in this way, only three people may know the sale price: the seller, the buyer and the auctioneer. But the public, by law, cannot know the price, unless the vendor and purchaser give their written consent to publication – and most do not. The auctioneer cannot reveal the sale price without breaching the law.
This produces huge price uncertainty in a very depressed housing market and prevents buyers and sellers from making informed investment decisions based on accurate and up-to-date house price data. At present, the only market guidance provided is the asking price set by the seller which may greatly exceed the price finally agreed on completion of the sale.
The Data Protection Commissioner has decided that under EU law, the sale prices of properties sold through private treaty are personal and cannot be disclosed. Private interests, it might seem, are placed above the common good and the very obvious public need to establish a transparent property market in which buyers and sellers can have full confidence.
In Britain, house transactions are registered and sale details are made available to the public. Ireland should do likewise and establish a similar property register. And, as in Britain, legislation can be passed to amend the Data Protection Act to enable publication of house prices.
In July, the Oireachtas won merited praise for a late amendment to legislation to prohibit upwards-only rent reviews in new commercial leases. At present, the Oireachtas is considering the Property Services (Regulation) Bill, which regulates how auctioneers and others in the property sector operate.
That bill gives the Government an opportunity, by amending the measure, to restore some confidence to the depressed property market by providing buyers and sellers with the data they need to make informed investment decisions.