Tales from the Front Line

Damned Statistics

by Stuart Baldock
on July 28, 2010 in Buying in France

The well-known quotation about lies and statistics has never been more relevant than when trying to decipher commentary on the French property market. No-one really believes us when we say there are no reliable numbers to show if the market is going up or down and in what proportions. This is especially incredible to Anglo-Saxons, used to being able to obtain accurate information about almost everything.

Statistics are available. The problem is that they come from different sources, using different parameters, often reflecting what the author wants to prove rather than reality. Individual agents have far too small a view of the market to be a valid source, and the kind of multi-office agencies found, for example, in the UK just don’t exist. There are several professional organizations, the best known being the FNAIM (French Real Estate Federation) and many franchises such as Century 21 and ORPI. There are also the Notaries, through whom virtually all transactions must pass.

The FNAIM asks its members to provide statistics, but it is not obligatory. It is obligatory for agents who wish their property to be listed on the main FNAIM website – but so few potential buyers consult it that agents are not motivated to provide the information. The result is that only 5 – 10% of overall transactions are available to the statisticians of the FNAIM. Too small to count, really. The other professional bodies are even less representative.

Franchisees are again encouraged to upload details of transactions to their administrators – and this is one source of statistics but again it is too small to be meaningful. Often these statistics are not qualified: unusual transactions (outstandingly high value, or property in need of total rebuilding, for example) may be included in the overall averages, thus skewing the statistics. If there is a sudden ‘run’ on studios (which have a higher value per square metre than larger apartments) average value statistics may be false for that period.

The Notaries should be a good source and to an extent they are. The problem is that their statistics are at least three months behind the market (the average time from conditional exchange – for which no statistics are gathered - to completion) and don’t provide a day-to-day snapshot. Also their statistics are quite bald. It is not easy to know the condition of the property sold, which floor it was on, sunny or facing north… For houses it’s even more difficult to judge.

The only people who really know what is going on are the Property Registrars; they collect all the information – and the taxes – for the fisc. The fisc says it cannot provide statistics as everything comes jumbled together – residential, commercial, land…  It would just be too expensive to sort it all out and provide accurate statistics. However, when the taxman thinks he is due more tax because a transaction has taken place at an unrealistic price (and this is not unusual) he soon manages to dig out and analyse the requisite statistics! “Damned Statistics” indeed for the buyer who has his conveyancing costs hiked by 30% or his Wealth Tax reassessed!

Property, Vision, Stuart, Baldock, France, French, market, statisitics, transactions, tax