Centre for Real Estate Research Graduate School of Business, Ucd

This study examinees the relationship between guide and sale prices for residential properties in Greater Dublin during the recent housing boom. The results indicate that large degrees of divergence can be present and that auctioned properties tend to sell more frequently at a premium to their guide price and that the average level of premium is also higher. These findings are confirmed by econometric analysis. It is proposed that the two potential causes behind this mispricing are the speculative boom in the Dublin market during the period and the potential that agents build into auction guide prices an element of underpricing in order to increase interest in the properties on the market.