Explanatory Memorandum to COM(2025)100 - Non-financial commercial real estate statistics - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2025)100 - Non-financial commercial real estate statistics. |
|---|---|
| source | COM(2025)100  |
| date | 11-03-2025 |
Contents
Reasons and objectives for the proposal
Past financial crises have shown that developments in real estate markets can have severe repercussions on the stability of the financial system and the economy as a whole. The European Systemic Risk Board (ESRB), which is tasked with providing macro-prudential oversight of the EU financial system and preventing and mitigating systemic risk, has identified significant gaps in the availability of comparable information on prices, rents and construction starts in the commercial real estate sector. This hampers its ability to provide a sound analysis and identify possible risks across countries. In its Recommendations of 31 October 2016 (ESRB/2016/14) ( 1 ) and of 21 March 2019 (ESRB/2019/3) ( 2 ) on closing real estate data gaps, the ESRB explicitly asked the Commission to propose legislation to fill the data gap on the physical commercial real estate. The Council has also encouraged the development of commercial real estate statistics in its conclusions on statistics in recent years.
While financial statistics covering financial system’s exposure to commercial real estate credits fall under the competence of the European Central Bank and the European System of Central Banks, the non-financial statistics as regards the physical commercial real estate market are under the responsibility of the Commission (Eurostat) and the European Statistical System. Therefore, this proposal focuses on non-financial commercial real estate statistics and would fill a significant gap in the availability of such statistical information needed for macro-prudential purposes. Currently, there are few official sources of non-financial statistics on commercial real estate, and the availability of more statistics would be crucial for policymakers to assess potential risks to financial stability. Most of the information used by policymakers is currently purchased from private organisations.
In recent years, the Commission (Eurostat) and the Member States have jointly investigated the feasibility of developing non-financial commercial real estate statistics. They have made significant progress particularly on prices, rents and construction starts, although considerable practical and methodological challenges remain. The proposal would ensure that these statistics are comparable and consistent across EU Member States. Without this initiative, the statistics could be provided on a voluntary basis, but the coverage in terms of Member States would remain limited if some countries do not send data and the comparability of the statistics across Member States would not be ensured.
Eurostat’s and the Member States’ efforts to develop non-financial statistics on the commercial real estate statistics domain were documented in the Commission staff working Document ’Final progress report on commercial real estate statistics’ (SWD(2023) 434 final) ( 3 ). The progress has not been even across all indicators or across all Member States though, particularly where action is voluntary. In addition, methodological challenges remain as data sources and the size of commercial real estate markets vary from country to country. Due to limited availability of data sources and insufficient quality of statistics, the indicators on rental yield indices and vacancy rates that were recommended by the ESRB are not included in this Regulation. It is necessary to continue to invest in methodological improvements and capacity building for such statistics.
Consistency with existing policy provisions in the policy area
The proposal is fully consistent with existing provisions in EU legislation on statistics, in particular Regulation (EC) No 223/2009 ( 4 ) of the European Parliament and of the Council.
Legal basis
The legal basis for this proposal is Article 338(1) of the Treaty on the Functioning of the European Union (TFEU). This provision states that, acting in accordance with the ordinary legislative procedure, the European Parliament and the Council must adopt measures for the production of statistics where necessary for the performance of the activities of the EU.
Furthermore, Article 338 i TFEU sets out the requirements for producing EU statistics, stating that they must meet standards of impartiality, reliability, objectivity, scientific independence, cost-effectiveness and statistical confidentiality without putting an excessive burden on businesses (‘economic operators’).
Subsidiarity (for non-exclusive competence)
Each EU Member State is responsible for producing and publishing official statistics that cover its territory. To ensure that those statistics can then be compared between Member States, coordination at EU level is needed in the form of legislation and guidance on the definitions, sources and methodologies used. Comparable statistics are essential for policymakers in the Member States and at EU level.
The objectives of the proposed regulation cannot be fully achieved by Member States acting alone. Action would be more effective if taken at EU level, on the basis of an EU legal act ensuring the comparability of statistical information in the statistical domain covered by the proposed act. Data collection itself, meanwhile, is best carried out by the Member States.
Proportionality
The overall aim of the proposal is to fill significant gaps in terms of non-financial commercial real estate statistics needed for macro-prudential purposes at EU and national level. These statistics will be used to monitor financial stability. They will also be used for fiscal, monetary and macro-prudential policymaking and for research on real estate markets. They will be made available to users free of charge.
In terms of administrative burden, the main impact will be on national statistical institutes. They will need to invest in the development and production of the non-financial statistics on the commercial real estate. The data used for the statistics will be sourced from existing administrative databases and from real estate organisations which collect relevant data, or will be based on statistical information already collected from businesses. There will therefore be little to no additional burden on households or businesses. The proposal would have no significant direct economic, environmental or social impact, and would not entail significant spending.
In line with the proportionality principle, the proposed regulation confines itself to the minimum required to achieve its objective and does not go beyond what is necessary for that purpose.
Choice of instrument
As non-financial commercial real estate statistics are not yet covered by existing EU legislation, it is necessary to propose a new piece of legislation.
Policy and business decisions also depend on comparable, harmonised and high-quality non-financial commercial real estate statistics at European level. The best way to secure such statistics is through a regulation, which is directly applicable in all Member States.
3. RESULTS OF EX POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
Stakeholder consultations
On 27 November 2023, the Commission published a call for evidence document on the initiative to propose legislation on commercial real estate statistics on the ‘Have your Say’ portal ( 5 ). Five European real estate associations provided feedback on the initiative, generally emphasising the urgent need for better statistics on commercial real estate.
The European Statistical System Committee (ESSC) was consulted on the draft proposal at its meeting in February 2024. The ESSC acknowledged the increasing user demand for new comparable statistics, which are also highly important for monitoring financial stability, for macro-prudential supervision and for fiscal and monetary policymaking in the EU. The Committee expressed its support for a regulation of the European Parliament and of the Council on non-financial commercial real estate statistics. The Committee welcomed the fact that the draft Commission proposal sought to strike a balance between user needs and the feasibility, costs and burden of producing these statistics.
These consultations were very important because, in terms of administrative burden, the main impact will be on the national statistical institutes (NSIs). They will need to invest in the development and production of the envisaged statistics. The data used for the statistics will be sourced from existing administrative databases and from real estate organisations which collect relevant data, or will be based on statistical information already collected from businesses. There will therefore be little to no additional burden on households or businesses.
Collection and use of expertise
The proposal has benefited from contributions provided by experts from: the national statistical institutes (through the Commission expert groups on real estate price statistics and on short-term business statistics); the Commission’s Directorate‑General for Economic and Financial Affairs and Directorate‑General for Financial Stability, Financial Services and Capital Markets Union; the European Central Bank and the European Systemic Risk Board; and other international organisations such as the International Monetary Fund and the Bank of International Settlements.
Impact assessment
A full impact assessment was considered unnecessary due to the fact that no policy choice was available to the Commission, given that the ESRB has specifically tasked it in its 2019 Recommendation to propose legislation to fill the existing data gap in the domain of non-financial real estate statistics. Furthermore, the new proposal will have minimal costs (especially for businesses) given that it will largely rely on reusing existing source data in administrative or privately owned databases.
In 2023, Eurostat carried out a survey among Member States to assess the progress made on developing price and rent indicators for commercial real estate. On price indices, 15 out of the 16 countries that had evaluated the available data sources reported that they were or would be using administrative data sources such as registers of real estate transactions or registers of appraisal values. One country had set up a dedicated survey.
On rent indices, 12 Member States provided information: 5 of them reported using administrative data sources, 2 used private data sources (e.g. data from real estate organisations), 2 relied on data on rents already collected for short-term statistics; and 3 used a combination of these types of data sources.
In addition, in 2022, Eurostat collected estimates of the costs Member States would incur, for collecting data on construction starts and work completions. The data collection for these variables will build on the existing data collected on building permits, and will be fully based on administrative data. This will not result in any additional costs or burden for businesses and households. It will only affect (local) building administrations.
In response to the Call for Evidence, in November-December 2023, five associations welcomed the Commission initiative and the opportunity to establish common definitions and improve data availability on commercial real estate. One association was doubtful regarding the assessed minimal impact on businesses. The primary reason was the immaturity of underlying databases that may not be sufficiently digitalised and may not capture the commercial real estate as well as the residential real estate. That association stated however that this may be due to the current absence of harmonised definitions on commercial real estate.
The proposed regulation would therefore have no significant direct economic, environmental or social impact, and would not entail significant spending. It would have minimal – if not zero – impact on small, medium and large businesses. It would also provide policymakers and other users with an enhanced evidence base.
Fundamental rights
The proposal has no consequences for the protection of fundamental rights.
4. BUDGETARY IMPLICATIONS
The financial impact of the proposal is of unlimited duration with a start-up period of 3 years, from 2026 to 2028. The legislative financial and digital statement only covers the remainder of the current Multiannual Financial Framework (MFF) ( 6 ). Therefore, funding will continue to depend on the agreements reached for the next MFF.
For 2026 and 2027, funding will come from existing programme allocations and no additional funding is required.
The total appropriations for 2026 and 2027 are estimated at EUR 3.6 million. Detailed budgetary implications are set out in the legislative financial and digital statement.
5. OTHER ELEMENTS
Implementation plans and monitoring, evaluation and reporting arrangements
The proposed regulation is expected to be adopted by the European Parliament and the Council in 2025, with the Commission’s implementing measures to be adopted shortly thereafter. It is expected to apply from 1 January 2026.
The Commission (Eurostat) will monitor implementation of the proposed regulation by the Member States. Particular attention will be given to the quality of the statistics in terms of their completeness, reliability, timeliness and comparability. The Commission (Eurostat) will also monitor the costs incurred by national statistical institutes in developing and producing the statistics.
The Commission (Eurostat) will use existing monitoring and evaluation tools, valid for all of Eurostat’s statistical output. These already allow a good analysis of any changes in the effectiveness and efficiency of the new statistical initiative and in the quality of the data produced.
Detailed explanation of the specific provisions of the proposal
Article 1 of the proposal sets out the aim of the Regulation, which follows the formulation of ESRB’s recommendation F - Establishment of a common minimum framework for the physical commercial real estate market (ESRB/2019/3). This article also clarifies that the regulation only deals with non-financial commercial real estate statistics (referred to as ‘indicators of the physical commercial real estate market’ by the ESRB).
Article 2 provides definitions. The proposal incorporates the definitions of commercial real estate which are consistent with definitions used in the ESRB recommendation.
Article 3 requires that the sources and methods used shall meet the quality requirements laid down for these statistics.
Article 4 describes the rights and obligations of Member States and data holders as regards access to data, with reference to Regulation (EC) No 223/2009.
Article 5(1) refers to the annex to the basic act, which includes the list of variables that are required. These are:
·building permits (number of dwellings, usable floor area)
·construction starts and work completions (usable floor area)
·commercial real estate price indices
·commercial real estate rent indices
·value of transactions of commercial real estate.
Article 5(3) specifies that this list may be amended by delegated acts in accordance with the procedure in Article 9.
Article 5 i lists the data characteristics, including breakdowns of variables, that the Commission may require Member States to provide through implementing acts (adopted in accordance with the procedure in Article 10). It also specifies that the Commission may adopt simplification measures, which should take into account the size of commercial real estate markets in different countries. Such measures may be used to relax certain data requirements for countries with small commercial real estate markets.
Article 6 lays down the quality criteria and quality reporting requirements. It requires Member States to transmit to the Commission (Eurostat) metadata, quality reports and inventories every year.
Article 7 provides that pilot studies may be carried out before any new data requirements are adopted in future.
Article 8 provides for the possibility of using the EU budget for the development of the commercial real estate statistics required by this regulation by means of grants, and for the pilot studies.
Article 9 lays down the procedure for the adoption of delegated acts, while Article 10 does the same for implementing acts.
Article 11 provides for the possibility for Member States to submit a request for a derogation from some of the requirements of either the basic act or an implementing act. Derogations may be granted for a maximum period of three years and should be requested within 3 months of the adoption of the relevant act.
Article 12 amends Regulation (EU) 2019/2152 on European business statistics ( 7 ) to remove the building permits variable.
Article 13 specifies the date of entry into force. The proposed date is 1 January 2026.