Property deals strong despite downturn, says e-conveyancing pioneer PEXA

Property transfer numbers for June are looking stronger than a year ago and new property listings are up across the nation.

Property Exchange Australia chief executive Glenn King. Picture: Jim Rice

Property transfer numbers for June are looking stronger than a year ago, new property listings are up across the nation and refinancings were up a record 30 per cent last month, according to new data from the nation’s biggest e-conveyancing operator.

Property Exchange Australia (PEXA) chief executive Glenn King said while the coronavirus pandemic had triggered some slowdown in property settlements over the past three months, it had been nothing near the doomsday levels many expected.

“We are not seeing the drop to the degree that was initially predicted. There has been a slowdown but nowhere near to the extent that had been suggested,’’ he told The Australian in his first media interview since taking up the role earlier this year.

“People are still looking at transacting in property. It is safe and secure. We are seeing some positive signs of recovery in NSW and other jurisdictions.

We are also seeing significant increases in refinancing with consumers taking advantage of offers.”

Mr King stressed the worst of the downturn was likely to be in the September-October Spring selling period.

He said Western Australia had been hit hardest with a 27 per cent decrease in transfer transaction volumes in May.

In contrast, Victoria was down only 3 per cent and NSW was flat.

More than 70 per cent of all property transfers nationally now happen online via PEXA, which was established by a 2010 agreement by the Council of Australian Governments to modernise the process of buying and selling property. Its original shareholders were the state governments and the big four banks and they were later joined by Macquarie Group, billionaire Paul Little’s Little Group and the then private equity-backed, and now listed, Link Group.

In November 2018 Link acquired PEXA in a $1.6bn joint bid with CBA and Morgan Stanley Infrastructure Partners after a sharemarket float of the company was abandoned.

An IPO remains off the short-term agenda. “I think the time is right for us to be in this structure. What happens in the medium and long term will be decided in due course,’’ Mr King said.

PEXA is chaired by former Australian Securities & Investments Commission chairman Alan Cameron.

Victoria has now moved all of its property transfer transactions online, while NSW is not far behind.

In the states that still allow paper property settlements, Mr King said digital property transfer volumes in Queensland were up 147 per cent between February and the end of May, while in South Australia they were up 232 per cent.

“The adopting of digital technology has accelerated. We went from doing 30 per cent to 80 per cent of property transactions in South Australia in less than a week,’’ he said.

In Queensland 30 per cent of transactions are now digital and PEXA is well advanced in its negotiations with the ACT government to have its platform go live there in the second half of the calendar year.

It is also in negotiations with the Tasmanian and Northern Territory governments to expand its services into those states.

“From a platform perspective, it has to be a national-based solution. If you go back to a state-based outcome, there will be increased complications,’’ Mr King said.

“A story that is not fully celebrated and acknowledged is the whole industry coming up with electronic conveyancing and having all the states, the banks and the commonwealth making this happen. If we didn’t have this platform, who knows what would have happened over the past three months.”

His comments come ahead of a ministerial forum in Sydney on Wednesday being hosted by SA Planning Minister Stephan Knoll and NSW Customer Service Minister Victor Dominello to support the next steps for national competition policy for e-conveyancing.

Law Council of Australia President Pauline Wright and Australian Banking Association CEO Anna Bligh, will present at the forum, together with the ACCC chair Rod Sims. The introduction of a national framework has become even more important as a national productivity reform in light of the COVID-19 crisis.

PEXA has been criticised for entrenching its monopoly in e-conveyancing, which has been aided by some state mandates forcing the use of the platform for nearly all conveyancing transactions.

Competitors have arisen in recent years, including Purcell Partners and the ASX-backed Sympli Australia, which in December completed its maiden financial property settlement.

Mr King said PEXA welcomed competition. “With all competitors you just need to have a better value proposition,’’ he said.

The group is now looking at other services it can provide to SME customers.

“One of the things we are helping on is cyber security. What other parts of the paper chain can we try to remove? What machine learning and AI trends can we use?’’ he said.

PEXA is also looking at options to expand into Britain and New Zealand, which have similar land transfer systems to Australia.