Pricing regulation of electronic conveyancing services in NSW

IPART has completed our investigation of an appropriate pricing regulation framework for the provision of electronic conveyancing services in NSW.

We have now released a Final Report

From 1 July 2019, all mainstream property dealings in NSW must use electronic (eConveyancing) rather than paper conveyancing.

The Premier asked us to conduct this review to ensure the regulatory settings and fees charged for the provision of eConveyancing services are fair and transparent for all parties.

In releasing our Final Report, we considered stakeholder comments on our Issues Paper, Draft Report and feedback at the Public Hearing.

Our Final Report sets out our findings and recommendations and rationale for these.  Our findings and recommendations include:

• Although competition is emerging, the lack of interoperability between ELNOs’ systems is constraining its development.
• We found that PEXA's current prices are reasonable, and so we recommend that maximum prices for any ELNO be set as PEXA’s current prices with an annual CPI cap from 1 July 2020 for two years.
• Interoperability between ELNOs has significant potential to promote competition, as it allows each party in the settlement process to use the ELNO of their choice.
• We consider that building direct connections between the two existing ELNOs is the preferred approach to achieve the benefits of competition in a cost-efficient way, given the current state of the market. We recommend regulators require the two existing ELNOs to build direct connections.
• We found that NSW LRS has made savings from the increased uptake of eConveyancing so can absorb the cost of investing in a new platform to connect multiple ELNOs without introducing a new fee.
• Revenue NSW’s prices should be set to recover some of the costs it incurs in providing duties verification services, as these services are outside its core tax collection activities.