Summary and conclusions

• Author: Consumers, Health, Agriculture and Food Executive Agency (European Commission), Deloitte consortium, IPSOS, London Economics
• Pages: 220-231

220

9.Summary and conclusions

Real estate services is the worst performing market of the 42 markets studied in the

European Commission’s Consumer Market Scoreboard (2016 edition).197 Moreover, large

differences in market performance are observed across Member States. The market for

real estate services is complex and largely regulated at the national level. The complexity

of the market is caused by:

•Number of steps involved in both the conveyancing and renting/letting process;

•Number of different market agentsactive during the conveyancing and

renting/letting process and interacting with consumers;

•Real estate transactions are infrequent for the average consumer (especially for

buyers and sellers).

Moreover, in a comparative perspective, this study observed cross-country differences

with regard to:

•Legislation governing the conveyancing and renting/letting process;

•Regulation of the profession of real estate agent; and

•Actors involved in real estate transactions and the extent of service provision.

Overall, one of the main problems behind consumers’ dissatisfaction with the real estate

services market seems to be related to discrepancies in the levels of supply and demand

for properties. Across the EU28, 32% of respondents surveyed as part of this study, who

had recently bought/rented a property (or who had attempted to do so), had encountered

difficulties due to increasing prices/rent for properties and 29% had experienced problems

due to the lack of affordable housing. This type of problem was more frequently mentioned

by younger consumers; for example, 24% of over 54 year-olds had experienced problems

due to the lack of affordable housing, compared to 33% of 18-34 year-olds. Issues arising

from a shortage in supply, however, go beyond the question of high market prices and can

result in a power hierarchy and discrimination. Professionals in the real estate market could

potentially take advantage of this type of situation and exercise undue influence on

consumers (e.g. put pressure on consumers to quickly conclude a transaction).

This consumer market study identified aspects of the real estate services market that

are most likely to be problematic for consumers; and, in these areas, actions should

be undertaken to foster consumer awareness and consumer protection:

•Level of regulation on conveyancing/renting;

•Policy measures, including the establishment of a minimum set of qualitative

standard requirements, to improve the quality of real estate services

•Information provision on real estate properties;

•Cross-border transactions;

•Choice in the market for real estate services;

•Real estate agency fees and information provision about such fees;

•Consumer problems and complaints.

The market activities covered under the study are:

•Intermediation in buying, selling and rental of real estate on a fee or contract basis;

•Advisory activities and appraisal services in connection to buying, selling and rental

of real estate, on a fee or contract basis.

197 https://ec.europa.eu/info/sites/info/files/consumer_markets_scoreboard_2016_en.pdf