THE HOUSING MINISTER has said he will “look into” the dangers of “impulse” buying that could be associated with online bidding for homes.

Speaking from the Fianna Fáil think-in in Tullamore, Co Offaly, James Browne remarked that with online bidding, people could make offers at “three in the morning that they might, in the cold light of day, not put themselves into”.

An ESRI report in February found that people using online bidding platforms to buy homes are far more likely to bid higher and take greater financial risks in buying homes.

While the study found there was a perception of “fairness” with online auctions, online bidding platforms saw prices jump by as much as €16,000.

The ESRI pointed to theories on “auction fever” and “loss aversion”, which suggest that competitive environments drive individuals to try to beat others.

When asked by reporters about concerns with online bidding, Browne pointed to his previous role as minister of state at the Justice Department.

“I’d be familiar with a lot of that type of impulse movements from when I was Minister of Justice and over gambling, and would have spent a lot of time speaking with professionals in the area of gambling,” said Browne.

He added that this “impulse is quite dangerous”, especially if “they feel under pressure”.

He also warned that people could make decisions at “three in the morning” that they might not make “in the cold light of day”.

“It’s not something I’ve looked at,” said Browne, “but it’s certainly something I will, because it’s a very interesting point around the psychology of what people are doing in those types of situations.”

When asked to expand on potential similarities between gambling and online bidding for homes, Browne replied: “I wouldn’t know enough to answer that question, to be honest, at the moment.

“It’s not something I’ve thought about before.”

However, he added: “Bringing my previous experience to bear, my previous conversations with psychiatrists in the area of mental health, in the area of gambling, I know impulse decision-making, where you’re spending an awful lot of money, and you feel under pressure for all sorts of reasons.

“That can be quite dangerous for people.”

Browne remarked that he would “go back and talk to some of those psychiatrists to see their view at this type of mechanism, is it dangerous?”

He added: “Instinctively, I would have concerns. But I need to look into it.”

Elsewhere, Browne was asked about the potential for the government to “tackle bidding wars”.

“What you want is fairness,” said Browne, “and there should be fairness between the buyer and the seller.”

He said that at the moment, the “system favours the seller and puts the buyer in a very difficult situation”.

“A situation where they have to put an awful lot of trust in people that they don’t really know.”

While Browne said that the “vast majority of it is done true and honestly”, he also questioned if the “balance is correct” and remarked that he is “not so sure it is”.

“We’re going to get working on that over the next couple of months to see where that balance is, and should it be pivoted back more towards the purchaser,” said Browne.

“Fairness and transparency are very important around that.”