There is no evidence that deregulation of real estate conveyancing or transactional services in the European Union would lead to lower costs for consumers or higher efficiency, according to preliminary conclusions of a new independent report produced by Professor Peter L. Murray of Harvard University.
Prof. Murray found that deregulation of real estate conveyancing services in what are often far from perfect markets does not lead to improved services at lower costs. Indeed, in deregulated markets it appears that groups such as banks, lawyers and brokers are able to influence costs and practices based on their strategic position more than in regulated markets. “In the most highly regulated jurisdictions such as Estonia and Germany, average costs of real estate conveyancing are low, the registry systems function effectively and consumer satisfaction appears to be high,” said Prof. Murray.
Prof. Murray’s study comparing conveyancing systems and costs in Germany, France, the United Kingdom, Sweden, Estonia and the U.S. was commissioned in the context of an ongoing review by the European Commission of competition among the regulated professions within Europe.
But Prof. Murray sees “little reason to foster standardization of real estate conveyancing regulation, practices or costs within the EU” as differences in costs and practices within the EU “are not so significant that there is any risk of impeding real estate development or commerce among member states.”
On the contrary, Prof. Murray concludes, “a degree of diversity in real estate practices within the EU can lead to improvement of standards generally, as different Member States can observe and learn from each other.”
Klaus Woschnak, president of the CNUE, welcomed Prof. Murray’s preliminary conclusions: “In all the countries studied, fees and costs of conveyancing professionals represent a tiny portion of the value of most real estate transactions, generally of the order of less than 1%, and are generally dwarfed by real estate brokerage costs and in some cases by taxes. There is nothing to indicate that conveyancing costs are a significant burden on lively real estate markets in any of the countries studied.”