Parliamentary report is simply ‘spinning the wheel’
Inquiry urges recommitment to interoperability but industry says report 'confirmed what was already widely known'.
A long-awaited report into competition in NSW’s highly concentrated e-conveyancing system fails to deliver on much-needed reform in the industry, the Australian Institute of Conveyancers NSW said.
The report, tabled in parliament this week, was the product of an upper house committee inquiry that looked at issues like outages, pricing, enforcement and market interoperability.
A key concern raised in public hearings was that property exchange network PEXA, which holds a near monopoly in the market, was standing in the way of competition.
In its report, the inquiry committee found the market was problematic and urged a recommitment to interoperability.
It also recommended its report be referred to the ACCC for further investigation and said the NSW Registrar General should push regulator ARNECC to recommit to interoperability.
The proposed reforms, shelved indefinitely earlier this year by ARNECC, would boost competition, reduce prices, drive innovation and improve resilience in e-conveyancing, the report argued.
The overhaul, which would allow practitioners using an electronic lodgement network operator (ELNO) to complete transactions with entities on other digital platforms, was initially put on hold in 2024.
AIC NSW president Jennie Tonner said the report confirmed what “was already widely known” in the industry.
“It would appear from comments seen that even though it is being referred to ACCC for further investigation, that is unlikely to happen. So spinning the wheel and achieving nothing still seems to be the same result,” Tonner said.
The peak body, in its submission to the inquiry, made an urgent call for interoperability, arguing that it would deliver “competition in the true sense” to the market.
The head of the inquiry, independent MP Taylor Martin, said the NSW industry had been a monopoly for too long.
“This is a problem for competitive pressure, innovation, customer choice and resilience. PEXA and the banks have behaved anti-competitively, slowing down the interoperability project,” Martin said.
“ARNECC’s decision to pause the interoperability program is extremely disappointing after years of work towards interoperability.
“It is disappointing that we have reached the point where the committee feels the need to refer our report to the ACCC.”
In a statement, PEXA said it continued to act in the best interests of its customers, stakeholders, employees and home buyers and sellers.
“PEXA rejects the committee’s finding that it did not demonstrate commitment to the interoperability program, or that it delayed or hindered the program,” a spokesperson said.
“As stated in its evidence to the Committee, PEXA engaged extensively and in good faith with ARNECC, regulators and industry participants throughout the interoperability program since its inception, including participating in more than 260 three-hour design meetings and workshops.”
PEXA had advanced interoperability capability “consistent with the agreed design; participating in pilot transactions; and investing more than $22.5 million in the program,” the spokesperson said.
Nearly all e-Conveyancing transactions in NSW use PEXA’s exchange process, giving the digital property platform a stranglehold on the market.
In April, the NSW Independent Pricing and Regulatory Tribunal said it wanted to rein in fees charged by PEXA in a proposal welcomed by conveyancers.
