PROPERTY A
PUBLICATION
NOW
ISSUE 9
WHAT’S INSIDE 2-3
Data: A massive first quarter of 2021 for the property market
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Analysis: Record low interest rates and the impact on consumers
6-7 Announcement: Digital settlements heading to the UK 8-9
News: Funding round for social and affordable housing in NT and QLD
10-11 Industry: An update from PEXA on competition 12-13
Feature: Queensland poised to be the next state to transition to digital
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Around the grounds: The latest sales settlement data from March
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Queensland breaks 14-year property record as national sale settlements up 30% year-on-year for the quarter By Isabelle Harris
Australia’s property sector has witnessed almost 200,000 properties settled during the first quarter of 2021, with Queensland recording its highest quarterly property sales settlement number (51,771) since 2007, according to the latest analysis by PEXA, Australia’s leading digital settlement platform. Queensland’s 40% jump year-on-year illustrates the current confidence in the north-eastern Australian property market, however the same could be
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said out west with Western Australia seeing 57% growth year-on-year and recording its highest property sales settlement number since at least 2015.
Mike Gill, Senior Research Manager, PEXA, said the Australian property market continues to perform strongly and sees no reason for this trend to change in the immediate future. “We have seen a really strong start to the year Australia wide, with the nation recording 30% year-on-year growth in property sales settlements when compared to the beginning of 2020. “It is particularly pleasing to see strong results for Western Australia and Queensland, two states that have experienced softer property markets in recent years. We have also witnessed considerable momentum build in Victoria, with the state living up to its property powerhouse reputation
recording the most sales settlements (more than 55,000) of any state during this period. “All Australian mainland states have jumped out of the gates well, with New South Wales posting 26% growth year-on-year, and South Australia experiencing a jump of 28% year-onyear for the quarter,” said Gill. But can this significant growth trend continue? All leading indicators suggest it will in the short-term, but Gill is continuing to closely monitor the outcomes of some major economic developments. “Much of the government stimulus initiatives have now, or will be soon wrapping up, such as JobKeeper and the Homebuilder scheme. It remains to be seen how much of an impact, if any, this will have on the property market,” said Gill.
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Record-low rates retained as property prices soar By Jarrod McAleese
Having slashed interest rates in 2020 twice, once in March and again in October, the Reserve Bank of Australia (RBA) has since maintained its record of 0.1%.
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The RBA routinely reviews and adjusts interest rates up and down to either stimulate the economy or cool it down in a period of crisis – alas 2020.
Governor Philip Lowe noted that the nation’s economy was making steady progress as it rebuilds in the wake of COVID-19.
There were positive signs in the RBA’s latest monetary policy update –
“The recovery in Australia is well under way and is stronger than had been
expected. The unemployment rate fell to 5.8% in February and the number of people with a job has returned to the pre-pandemic level,” Lowe said.
that “given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully.”
“GDP increased by a strong 3.1% in the December quarter, boosted by a further lift in household consumption as the health situation improved. The recovery is expected to continue, with above-trend growth this year and next. Household and business balance sheets are in good shape and should continue to support spending.”
To buy or not to buy? Lowe noted that “the Board does not expect the conditions (actual inflation being sustainably within the 2-3%, driven by unemployment falling to increase wage growth) for the adjustment of rates to be met until 2024 at the earliest.”
First home buyers may be tempted to enter the market – with lower rates, Key to Australia’s economic resurgence securing and maintaining a loan can potentially become more manageable. is a healthy property market. And when reviewing the current state-ofHowever, there’s a fine line – as buyers play, there’s no doubt that consumer race to take advantage of the current confidence is sky-high. conditions, prices can be forced up According to PEXA, Australia’s leading dramatically, as we’re seeing in the first quarter of 2021. digital settlement platform, in March 2021, sales settlements were up 26.5% In fact, there have been single days month-on-month and 43.8% year-onwith multiple properties selling for year, with new listings having soared more than $1 million above reserve. and buyers flocking to snap up their dream home. It remains to be seen how the RBA navigates this flurry of settlement And this trend has certainly caught the activity in market. There’s no indication eye of the RBA. of a slow-down on the horizon and the initially slated 2024 milestone may “Housing markets have strengthened need to be hastened in order to keep further, with prices rising in most up with the market’s momentum. markets. Housing credit growth to owner-occupiers has picked up, with strong demand from first-home buyers,” Lowe said. Property surge
However, the RBA is resisting calls from some circles to budge on its interest-rate stance, instead insisting 5
PEXA accelerates UK expansion, signing ThoughtWorks as global platform partner
PEXA, operator of the world’s first digital property exchange platform, has partnered with global software consultancy ThoughtWorks to help drive its international expansion plans, starting with bringing digital conveyancing to the UK remortgage market in 2022, with plans to subsequently extend to the wider sale and purchase market. Through its PEXA International business, PEXA is actively pursuing opportunities to introduce its experience and know-how to new markets, focusing on those with Torrens title systems, such as England, Wales, New Zealand and Canada, which still largely rely on paper-based property settlement systems or are making early progress towards digitisation. In Australia, PEXA has established a highly integrated and secure 6
property settlement platform that has successfully completed more than 7.8 million transactions and now handles more than 80% of all property transfer settlements in Australia. The platform is used by Australian state land title offices, 9300 practitioner firms, such as conveyancers and lawyers, and 150 financial institutions. Working with ThoughtWorks will allow PEXA to build out its platform according to the requirements of each market. It will also mean PEXA will be
able to offer greater value to potential partners in new markets, with the opportunity for customers to work directly with ThoughtWorks to develop bespoke extensions and elements such as APIs, tighter integration or even branded and customised user experiences.
buying process more efficient and less costly for all stakeholders, particularly homebuyers and sellers.
PEXA Chief Executive Officer Glenn King said PEXA sees enormous potential to work with jurisdictions making the transition to digital property settlements.
“Collaborating with ThoughtWorks as our build partner allows us to design and build a high performing solution that will deliver homebuyers and sellers in the UK with a faster, transparent and less stressful experience,” Bawa said. “There is a big appetite for change across the UK’s major banks and lenders, and an acknowledgement that technology will support the local conveyancing sector in setting a new standard.”
“Australia is the only country in the world to have a fully digitised property settlement process, and we’re firmly focused on leveraging the expertise and learnings our people have amassed over our 10-year journey in order to build a platform for growth into other key markets – starting with the UK,” King said.
Kristan Vingrys, Managing Director for ThoughtWorks ANZ, said “PEXA has been recognised and awarded for its innovation and outstanding industrywide impact, and it goes without saying that we are thrilled to become the exclusive build partner to help this great Australian pioneer’s international expansion.”
“We have a strong history of building collaborative partnerships with leading technology providers, governments, lenders and the conveyancing sector, and together we are committed to delivering positive outcomes for the UK community and the broader economy.” PEXA continues to grow the PEXA International team, led by UK Chief Executive James Bawa, who has more than 30 years of experience in the British financial services sector.
About ThoughtWorks We are a software consultancy and community of passionate purposeled individuals, 8,000+ people strong across 48 offices in 17 countries. Over our 25+ year history, we have helped our clients solve complex business problems where technology is the differentiator. When the only constant is change, we prepare you for the unpredictable.
Bawa said PEXA’s platform could help the British Government meet its objective of making the home7
Social and affordable housing in NT and QLD receives a boost By Isabelle Harris
Homes for Homes has opened a new grant funding round for social and affordable housing projects, with up to $140,000 now available for the first time across the Northern Territory and Queensland. Homes for Homes, established by The Big Issue, tackles Australia’s chronic shortage of 600,000 social and affordable homes by raising funds for housing providers through donations from property sales. Homeowners register with Homes for Homes, agreeing to donate 0.1% 8
of their property’s sale price to the initiative at the time of sale (for example, a $750,000 sale results in a $750 donation). A swell of support from the property industry and private donations have allowed this inaugural funding round for NT and QLD providers.
family violence, and Community Housing Canberra (CHC) properties, which allow women to transition from custody to employment, community connections, and housing. Across three previous funding rounds released to community projects, Homes for Homes has raised more than $1 million for providers in VIC and the ACT. PEXA Chief Corporate Affairs Officer Johanna Waldon says PEXA is passionate about extending its role to support Australia’s vulnerable. “By virtue of our day job, PEXA gets people safely into their new homes by settling over 20,000 properties each week. Addressing one of Australia’s largest social issues in homelessness is a natural and necessary extension of that. Homes for Homes CEO Steven Persson says the not-for-profit is delighted to open funding in new states and territories, and thanked PEXA for its contribution to increasing social and affordable housing supply. “2020 has shown us that more than ever, a lasting solution to homelessness is needed in Australia. Having a home is fundamental to people’s lives and positive future outcomes. It influences family life, work, community connection, health, and wellbeing.”
“Homes for Homes is a leader in this sector, and PEXA is proud to play a role in extending the successful grant funding program to reach those most in need within NT and QLD. Our people, our members and the wider industry are all very excited about what can be achieved.” The funding round officially opened on Monday 12 April and will close on Friday 14 May, with applications made via their website at homesforhomes.org.au/funding.
Previous projects delivered by Homes for Homes include YWCA Canberra properties, supporting older women and women with children experiencing 9
An update on competition from PEXA By Simon Smith
PEXA members were recently provided with a communication from our Chief Customer Office Lisa Dowie, regarding the important reform relating to enabling competition within the e-conveyancing sector and how it is tracking. I’d now like to reiterate this message more broadly with industry and consumers. Allowing new electronic lodgement network operators (ELNOs) to enter the property market and coordinating how present and incoming providers will interact with one another from a technical perspective – otherwise known as interoperability, remain key priorities for our industry. 10
PEXA is fully supportive of competition for our sector. We’re actively contributing to working groups covering these initiatives, in collaboration with all industry parties and great progress continues to be made. It’s always been our commitment that any solution developed doesn’t introduce additional risk, cost or complexity within the property
settlement process to our members or stability and cyber security you know and deserve remain key their clients. considerations for the working groups. Critically, Australia’s homebuyers and To support transparency of this sellers need to remain at the heart process, ARNECC has committed of any solution. We will continue to to publishing discussions around be strong advocates for this moving competition and interoperability on its forward. website, which are readily accessible. Looking ahead, PEXA is now Currently available documentation recommending that the next phase includes a statement from of the journey is dedicated to governments and industry bodies creating opportunities for industry confirming the collaborative approach professionals to provide “hands to industry’s next steps, as well on” perspectives, ensuring that the as a description of the emerging journey maps being conceptualised interoperability model. are reflective of the feedback from industry. As always, if you have any questions, reach out to us and keep an eye out We’re also advocating for the for further updates in upcoming continuation of shared workspaces, editions of Property Now. so that in any system, all participants can see what needs to be done to complete a transaction. In addition, we’re working to ensure the high service standards, system 11
The future of property in Queensland is digital By Isabelle Harris
The majority of property settlements in Queensland are now being processed by the nation’s leading platform, PEXA – and the state is well positioned to join Victoria, New South Wales, Western Australian and South Australia in officially moving its sector online.
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Increasingly, consumers and industry alike are profiting from a host of benefits, including faster processing times and heightened security.
transition to mandatory digital conveyancing is “inevitable”, with the upside for industry professionals and consumers clear for all to see.
And Townsville District Law Association (DLA) President Michael Murray believes the
“A large proportion of our members are using digital conveyancing now and they’ve been very vocal about the benefits it is providing to their clients and their business.
“We are living in an age of innovation within the legal landscape presently. However, we also live in challenging times and digital conveyancing is being used to ensure firms remain efficient and productive during this year and beyond. “The entire industry is become increasingly digitised and I certainly don’t see that slowing down. Firms need to be adaptive with their digital capabilities and receptive to their client’s preferences in the future.” Amidst this wholesale change to the way property is bought and sold in the Sunshine State, representative bodies are playing an important role in guiding legal practitioners. Murray says relationships between DLA’s and industry players such as PEXA will continue to be incredibly important as new conveyancing processes become the norm.
“District Law Associations and providers such as PEXA will continue to play a huge role in supporting their members during this change, as they have done in the past. “It’s important to continue to engage on a local level with local practitioners on key and monumental shifts in the legal landscape. “This collaboration has really helped with entering this new era of e-conveyancing.” Queensland is currently spearheading an early year surge in Australian property transfers, recording an increase of 26.6% year-on-year for sales settlements in March, according to data released by PEXA. And as the sector moves toward further transformation, the support of organisations such as the Townsville DLA, in addition to effective partnerships between adjacent industry players, will be key for the state’s continued digitisation.
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Around the grounds
NATIONAL
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Sales settlements March 2021
76,570
Sales settlements February 2021
60,508
Month-on-month change
26.5%
Year-on-year change
43.8%
QUEENSLAND Sales settlements March 2021
20,302
Sales settlements February 2021
16,034
Month-on-month change
26.6%
Year-on-year change
50.4%
NEW SOUTH WALES Sales settlements March 2021
20,487
Sales settlements February 2021
14,131
Month-on-month change
45.0%
Year-on-year change
40.8%
VICTORIA Sales settlements March 2021
20,676
Sales settlements February 2021
18,027
Month-on-month change
14.7%
Year-on-year change
34.0%
SOUTH AUSTRALIA Sales settlements March 2021
5,822
Sales settlements February 2021
4,525
Month-on-month change
28.7%
Year-on-year change
37.9%
WESTERN AUSTRALIA Sales settlements March 2021
9,283
Sales settlements February 2021
7,791
Month-on-month change
19.2%
Year-on-year change
67.8%
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Do you have feedback, a question or a story pitch? Get in touch with us at industry@pexa.com.au
