PEXA, which currently holds 80% market share in the conveyancing, is to face a threat to their near-monopoly in the next 18 months – just as their IPO, already being described as the biggest of the year, is set to be announced.
The e-conveyancing firm currently holds an 80% market share and is widely speculated to be launching on the ASX in the very near future, with multiple media outlets describing it as the largest of 2021.
If reports are to believed, however, several other players in the marketplace are aiming to get a piece of the some 400,000 property transactions that take place in Australia every year.
One of them is Lextech, an offshoot of Melbourne banking and legal firm Purcell Partners, and their Head of Operations, Jack Meredith, told Australian Broker that the dominance that PEXA has enjoyed was a direct result of its roots as a state-owned company.
“In summary, PEXA’s dominance and monopoly originated from PEXA having Victoria, New South Wales, Queensland & Western Australia as shareholders,” he explained. “When PEXA commenced operations in Victoria, the take up and interest was minimal. To obtain a return on their investment and recoup past losses, the Victorian Land Registry mandated e-conveyancing and subsequently sold their share.”
“PEXA’s dominance does not work for consumers and brokers as it is outdated technology and does not provide a comprehensive or satisfactory customer experience.”
According to Meredith, competitors like Lextech can offer the same services as PEXA, but with greater security and speed.
“Lextech is pre-existing platform that currently completes 95% of a transaction from loan approval to settlement,” he said. “We are not starting from nothing and seek to offer a comprehensive system that offers more than just land registration and settlement.”
“Further, we intend to rely on the New Payment Platform, which offers instantaneous payments, with far greater security than the existing settlement process of PEXA. This will give consumers access to their funds faster, and drastically reduce fraud, such as that previously experienced by PEXA.”
