Psychiatrists are to be asked for their opinion on the impact of online bidding platforms for homebuyers.
Minister for Housing James Browne told reporters at the Fianna Fáil think-in in Tullamore, Co Offaly, that he had “concerns” about the pressures people may feel when using a 24/7 online bidding platform when looking for a home.
Mr Browne said that, from his time as junior minister with responsibility for gambling, he was “familiar” with the dangers of “impulse movements”.
He told reporters: “That impulse is quite dangerous for people, you know, especially if they feel under pressure and not being able to kind of and put themselves into situations that at 3am in the morning that they might in the light of the day put themselves into.
“It’s not something I’ve looked at, but it’s certainly something I will.”
He added: “Instinctively, I would have concerns, but I need to look into it.”
Mr Browne said he would ask psychiatrists about the matter.
A study earlier this year found that overbidding was a characteristic of homebuying in Ireland.
The Economic and Social Research Institute (ESRI) conducted a behavioural science experiment examining the impacts of “auction fever” on the decision making of Irish homebuyers.
The ESRI researchers put hundreds of Irish homeowners and prospective buyers through simulations of different types of bidding processes in Ireland and elsewhere to see how they influence behaviours.
Participants’ bids were pushed higher in “open auctions”, such as through estate agents and online platforms, than in a sealed bid auction.
Those 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.
As bidding systems that involved open competition led to higher prices, the researchers said this aligns with behavioural theories on “auction fever” and “loss aversion”, which suggest that competitive environments drive individuals to try to beat others and that people feel losses more than equivalent gains.
While participants said they favoured the transparency of online systems due to the perception of fairness, their behaviour in auctions suggests that open systems may actually push up prices.
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Earlier, Taoiseach Micheál Martin said that he was favourably disposed towards the abolition of stamp duty for first-time buyers but did not give a commitment towards making a move on the issue in next month’s Budget.
Meanwhile, the Minister for Housing said he is open to reviewing stamp duty to improve affordability for people buying a home.
James Browne said that the main consideration is how the Government can help first-time buyers get “a starter home for themselves or their forever home”.
His party colleague Séamus McGrath said there should be relief for first-time buyers in terms of stamp duty.
“We’re providing huge assistance to first-time buyers to help devise a first home scheme before we purchase and so on. But on the other hand, to be asking them to pay a stamp duty, a taxation measure, I just don’t think that adds up,” said Mr McGrath.
Mr McGrath said he would be “keeping the pressure up” to ensure that the measure is delivered in the Budget.