Australian Industry Reform and Market Dynamics in the Real Property Sector
In part two of the five part Forming our Future Series, we review the industry reform in the Australian real property market and the foundations that have been laid for a future national electronic real property market place.
Over the past decade, there’s been significant reform and progress made towards simplifying the efficient exchange of property in Australia with a national Australian electronic property exchange.
First was the development of state based e-conveyancing projects such as the Electronic Conveyancing Victoria initiative (ECV). ECV launched in 2006 and processed around 200 transactions a month before it was decommissioned with its service now provided by Property Exchange Australia (PEXA).
Along with ECV, other Australian state-based registries also made progress with their own e-conveyancing initiatives, however to be a viable solution for the national focused banking-sector, a national platform was required with the support of the individual Australian Land Registries.
The National Electronic Conveyancing Office was formed in 2005 to progress the development of a national electronic conveyancing system. The initiative built upon the individual efforts of the states and territories with the aim of delivering a single national online facility that serviced the major conveyancing needs of government and industry across all jurisdictions. In 2008 electronic conveyancing was placed on the Council of Australian Governments (COAG) Agenda and the National E-Conveyancing Development Limited (NECDL) was formed to carry out that work.
In 2010, to fulfil the COAG agenda item to deliver a national electronic conveyancing solution to the Australian property industry PEXA (originally known as NECDL) was formed. While PEXA is the commercial entity behind the development, build and operation of a national property exchange platform, the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) is the body established to facilitate the implementation and ongoing management of the regulatory framework.
PEXA, currently an unlisted public company limited by shares, provides and operates an Electronic Lodgment Network (ELN) under license from ARNECC, as an Electronic Lodgment Network Operator (ELNO).
PEXA, as an ELNO, developed and operates an online national property exchange platform that allows property lawyers and conveyancers to electronically lodge Land Registry documents, and complete Financial Settlement. Financial Settlement is completed through a secure process involving the transfer of funds from source accounts via the Reserve Bank of Australia to destination accounts.
PEXA key financial stakeholders include Victorian, NSW, QLD and Western Australian governments (representing the land registry interests of the state governments), the major financial institutions/banks in Australia involved in land based financial transactions (land encumbered by mortgages, disbursements etc.), as well as a number of investors with interests around electronic property exchange (a full investor list can be found here).
The PEXA System is live in Victoria, New South Wales, Queensland and Western Australia and registration is open to property lawyers and conveyancers in operating these jurisdictions.
PEXA subscribers in these states can complete electronic transactions today at www.pexa.com.au.
PEXA currently supports the following transactions:
- Withdrawal of Caveat
- Discharge of Mortgage
- Settlement Notice
- And others
As at April 2016, PEXA has processed over 122,000 transactions.
The success of PEXA, both as a technological platform and as a business model, shows us the foundations for a future national electronic real property market place is already here.
In part three of the Forming our Future Series, we discuss how PEXA provides the property market with the revolutionary change the ASX and CHESS provided for equity markets.