PEXA owns the monopoly in the electronic property transaction market, but all that will change with new rules set to enforce competition on a national scale, explains Attwood Marshall Lawyers Licenced Conveyancer, Rachel Godden.
The conveyancing industry has undergone a significant transformation over the past few years and as COVID-19 and social distancing impacted our day-to-day lives, the ability to exchange property electronically became more integral to the industry. It is expected that by the year 2022, the conveyancing industry would have moved to 100% e-conveyancing.
PEXA and e-conveyancing
In 2008, the Council of Australian Governments (COAG) committed to creating a single, national e-conveyancing solution to the Australian property industry. In 2010, Property Exchange Australia (PEXA), was formed. PEXA offers its electronic platform in New South Wales, Victoria, Queensland, Western Australia and South Australia.
Information is easily shared between all participants and land registry verification of documents provides greater certainty of successful, on-time settlement. Paperwork is significantly reduced and funds are transferred electronically meaning fast access to cleared funds. There’s no longer a need to physically attend settlement. These are some of the many benefits of e-conveyancing.
PEXA are currently generating fees of approximately $170 million as they manage almost all transfers, mortgages and discharging of mortgages across five states. This could increase to an estimated $240 million once all jurisdictions are transacting on the digital platform.
Who are the current electronic conveyancing players in the market?
There are three e-conveyancing platforms currently available, or planning to be available to the market soon. These include:
- Property Exchange Australia (PEXA) – available in NSW, VIC, QLD, WA and SA
- Sympli Australia (Sympli) – available in NSW, VIC, QLD and SA
- Purcell Partners – currently in the process of gaining approvals from each state registrar
PEXA is the most widely used settlement platform, however they are set to lose their monopoly over the electronic property transaction market from next year onwards.
State governments have made a decision to allow lawyers, conveyancers and financial institutions to transact with customers on different platforms and not be restricted to any particular one. The new rules are intended to enforce competition.
The ACCC together with state governments of NSW, QLD, SA and ACT had been opposed by WA and VIC state governments until last month when WA conceded and agreed to the national standards. By mid-2021, all states are to enact legislation and the system by year-end that will allow parties to transact with others on different platforms and not be restricted.
“The ordinary mums and dads of Australia that are buying their property or selling their property – they are the ultimate winners,” NSW Minister for Customer Service Victor Dominello told The Australian Financial Review.
Mr Dominello said the agreement came after the states agreed the benefits of implementing an interoperable system would outweigh the costs. The conveyancing, legal and banking industries backed it, he said.
What does this mean for real estate agents?
The key to improving the competition will be interoperability, which means that PEXA and their primary competitor, Sympli, are to integrate with each other. Sympli is expecting to have five documents available by the start of the 2021 calendar, which is 80 percent of all registrations, mortgage registrations, transfers, discharges, caveat registrations and withdrawals. These documents are expected to be available in five states.
During COVID-19, PEXA and Land Registry Services NSW went so far as to allow documents which would normally be registered over the counter, i.e. Powers of Attorneys, to be registered through their electronic system as residual documents. E-conveyancing platforms are not a phase, this is the future.
With healthy competition in the industry, we may see an increase of activity for e-conveyancing, especially in states which have been reluctant to commit to the platform previously.
Real estate agents need to ensure that their clients are engaging lawyers who are registered PEXA or Sympli users that can settle transactions electronically in their relevant state.
How can Attwood Marshall Lawyers help?
Attwood Marshall Lawyers is an experienced electronic conveyancing firm. We are positioned right on the border and with offices at Robina Town Centre, Coolangatta, Brisbane and Kingscliff, our team can assist buyers with residential homes and investment properties in both states, even prior to the borders opening. Our experienced conveyancing team ensure new home buyers and property investors receive the most professional property law services when making their purchase.