This week's agreement by estate agents to stop misrepresenting property sale prices should have made reliable information easier to come by - but the agents say it will have the opposite effect
THERE'S A WEBSITE where an astonishing amount of constantly updated, absolutely accurate information about house prices is just waiting to be accessed. The database contains the price paid for every residential property sold since April 1st 2000 and its stated aim is to create a more fair and transparent market.
It is an enormously useful resource for both buyers and sellers, and serves as an essential guide for people making the most important financial decisions of their lives. The only problem is that it is not available in this country. The site, mouseprice.com, is shining a spotlight on property prices in Britain at a time when reliable information about Irish property prices looks set to retreat even further into the shadows.
This week a spat about some estate agents who had taken to misrepresenting the actual selling prices of the houses on their books in order to talk up a softening market turned into a full-blown row between the National Consumer Agency (NCA) and the Irish Auctioneers and Valuers Institute (IAVI).
The dispute began last Sunday when it emerged that The Irish Times had written to some estate agents expressing concern about exaggerated sales prices being submitted for publication in its property supplement. The letter - written by the property editor, Orna Mulcahy, at the end of March - described the problem of estate agent misreporting as endemic and suggested that some prices being submitted for publication were up to 20 per cent higher than the actual selling prices.
Within 24 hours, the NCA had taken up the case. On Tuesday, its chief executive, Ann Fitzgerald, held a meeting with the IAVI and the Institute of Professional Auctioneers and Valuers (IPAV), at which she expressed "very serious concerns" about the accuracy of private-treaty sale prices that were being published in the press. Determined to have the matter resolved quickly, Fitzgerald came out of the meeting and announced she had given the representative bodies just two days to get their houses in order.
The estate agents almost immediately complied with the NCA's demands - unsurprisingly, given the threats of legal action they'd been confronted with - and said that terms such as "region of", "close to" or "above" would disappear from their vocabulary.
That was not, however, where the story died.
The IAVI, which represents more than 2,000 estate agents, said that as a direct result of the NCA move, the property market would become less transparent as, under data protection legislation, the publication of actual sale prices rather than rough estimates would need the consent of sellers and buyers.
"Unless the legislation changes it is likely that very few sale prices, other than the small portion of properties sold publicly at auction, will be made known to the public," said IAVI president Edward Carey. "The IAVI has advised the National Consumer Agency that the solution being adopted will result in a market that lacks transparency."
Fitzgerald was furious. She rejected the notion that the NCA could in any way be held responsible for the property market becoming less transparent and accused estate agents of using data-protection legislation to fudge prices.
"The Data Protection Act is not new, and under it both parties have to agree to the prices being published," she said. "Either that has been happening or it hasn't, and if it has not been happening to date then estate agents have been in breach of that legislation for years.
"More importantly, if prices submitted to newspapers are misleading then a false market is being created and that is not in anyone's interest. It would be better to have no prices than false prices."
WHEN THE CHIEF EXECUTIVE of the IAVI, Alan Cooke, was asked by The Irish Times whether his members routinely asked both the buyer and the seller for their consent before giving the press any information about house prices, whether exact or "in the region of", he said he was not sure.
"I don't know. I haven't asked the question," he said. "Even the State authorities are mixed up about this, so how do you expect the estate agents to have the answers?"
There certainly does seem to be some confusion about the legal requirements when it comes to making house price information publicly available. Even the voluntary code of practice put in place by the recently established National Property Services Regulatory Authority (NPSRA) seems to be at odds with advice from the office of the Data Protection Commissioner.
While the Commissioner's office makes it clear that both buyer and seller need to give consent for information about the selling prices to be released, the NPSRA code says that "in sales other than at public auction a property service provider shall not disclose the specific price achieved without prior written consent of the client". The client here is the vendor, and no mention is made of the buyer at all.
Cooke believes the confusion he claims has been created this week will have serious consequences for the property market as a whole.
"The market simply cannot operate if information is not shared," he says. "Yes, to do so is a technical breach of the legislation, but the market simply cannot function without it."
He adds that if the only source of price information is estate agents who are "effectively gagged", it will lead to "a highly dangerous situation".
One large firm of estate agents contacted by The Irish Times this week said that after checking its recent figures, it had found an average price difference of 2 per cent between actual selling prices and the prices it had provided to this newspaper. It said that in some cases the actual selling prices were higher and in some cases lower than what was reported.
It pointed to a house in Ranelagh which it said had sold for €1.8 million but which had actually sold for €1.735 million, a difference that might look small until you realise it amounts to €65,000. Other examples included a house in Sutton which it said had sold for "region €1.3 million" when in fact it had sold for €1.29m.
These infractions, if they can be called that, are certainly fairly minor, although cynics might be forgiven, based on anecdotal evidence at least, for suggesting that this self-selected data was the thin edge of the wedge.
STORIES OF MUCH higher discrepancies between real and claimed selling prices abound. One person who spoke to this newspaper on condition of anonymity said his agent had called him asking his permission to report a house sale for the "region asking price" which he interpreted as being €880,000, the asking price when the house was put on the market. The house had actually sold for €717,000.
As it stands, there is nowhere an Irish buyer can go to get impartial, wholly reliable information about house prices. Two State agencies do have details of house prices - the Property Registration Authority and the Revenue Commissioners - but there is no official register that can be viewed by prospective buyers.
One industry source suggested to The Irish Times that one way to regulate the market and ensure it was fair and transparent would be to take it out of the hands of estate agents and make full disclosure part of the contracts.
"Once the deal is done it could be up to the solicitor to submit the purchase price to a national price index," the source said. "If anyone could be impartial, dare I say it, it might be the legal profession, because at least they are not trying to talk up the market.
"If I am selling a house for you, my main job is to get the highest price I can. The solicitor, on the other hand, doesn't really care about the actual selling price. Having a centrally managed price index would be fair and would accurately reflect what was happening in the market. I am not sure that estate agents should have the authority."
