Average property prices in Ireland are the highest in Europe and the cost of conveyancing is among the highest, according to a new report from the EU Commission's competition division.
The report calculated the average price of an Irish apartment or house at €303,000, almost twice the €159,000 average for the whole of Europe. Only England and Wales, with an average property price of €298,000, came near the Irish figure.
The fee for the conveyance of an average-priced Irish property was calculated at €2,426, the fifth highest figure of the 21 countries surveyed. Only Greece, France, Italy and Belgium were more expensive.
The researchers, from German and Austrian universities, examined the costs involved in the conveyancing of properties of different values, ranging from €100,000 to €500,000.
While Ireland was among the cheaper countries in the case of low-value properties, the conveyancing bill rose rapidly as the value of the property increased. For a €500,000 property, the average bill was calculated at €4,000, with only Greece and France proving dearer, while stamp duty, as per pre-budget rates, added another €37,500 to the cost of buying the property.
The Consumers Association of Ireland said the report showed conveyancing costs here were high by European standards. Chairman James Doorley said it was time to implement the recommendation of a 2006 Competition Authority report which called for the establishment of a profession of licensed conveyancer to specialise in the area.
"We believe the additional competition for lawyers would help to drive down costs," he said. The report said prices have fallen in real terms in England and Wales since the introduction of licensed conveyancers in 1986.
Mr Doorley blamed the practice by solicitors and estate agents of charging a percentage of the selling price for driving up costs considerably. "This happens even though the work involved on a €300,000 property and a €500,000 property is virtually the same.
"While some solicitors are now offering special deals on conveyancing, the costs here are still too high, because they are based on the old percentage of the selling price model," he said.
"Part of the reason for this is that solicitors are the only profession permitted by law to provide conveyancing services. In other common law countries such as Britain and Australia, there is a specialist profession of conveyancers who compete in the market."
The report also adjusted the fees for each country to take account of national income.
On this measure, Ireland fared better; for example, legal fees were found to account for 0.58 per cent of the transaction cost of buying a €500,000 house, compared to a European average of 0.83 per cent.
Ironically, the involvement of solicitors in property transactions is not mandatory in Ireland.
