Impacts of e-Conveyancing on the conveyancing industry - Deloitte

 
Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on
the conveyancing industry
May 2018
Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Proposal title goes here | Section title goes here

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Table of contents

Table of contents

Executive Summary                                                              1

Glossary                                                                       3

1. Introduction                                                                5

2. Current state of play in the industry                                       7

3. Benefits of current electronic system                                  20

4. Benefits of a 100% electronic system                                   28

5. Other impacts of an eletronic system                                   32

References                                                                36

Appendix A - Data collection                                              37

Appendix B - Modelling methodology for current images                     38

Limitations of our work                                                   41

General use restriction                                                  41

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Executive Summary

Executive Summary

The conveyancing industry is undergoing         The estimated benefits to practitioners in      e-Conveyancing allows
a digital transformation with the national      the 2016-17 financial year were $3 million,
roll-out of an electronic lodgement and         with 2% of lodgements completed on
                                                                                                practitioners, financial
settlement system. This system allows           the platform. The industry take-up rate         institutions, and
practitioners, financial institutions, and      affects the probability of a practitioner
government bodies to lodge documents            being able to transact electronically.1 For
                                                                                                government bodies to
and complete settlements electronically.        example, if 30% of all practitioners have       lodge documents and
This is part of a broader digital               the system and are willing to use it, the
transformation underway in the Australian       probability of a transfer transaction being
                                                                                                complete settlements
economy.                                        completed electronically is less than 10%       electronically. This is
                                                or one in every 10 transactions.2 This is
In 2008, the Council of Australian              further reduced if a transaction is unable
                                                                                                part of a broader digital
Governments (COAG) committed to                 to be conducted electronically due to the       transformation underway
creating a single, national e-Conveyancing      required forms being unavailable.
solution to the Australian property
                                                                                                in the Australian economy.
industry. In 2010, National e-Conveyancing      While the new system is generating
Development Limited, now known as               benefits, the experiences of practitioners is
Property Exchange Australia (PEXA),             varied. Firstly, some practitioners are not
was formed. PEXA has now rolled out its         achieving time savings due to productivity
electronic platform across New South            losses from learning a new system.
Wales, Victoria, Queensland, Western            Secondly, even when practitioners are
Australia, and South Australia.
                                                achieving these time savings, there is often
                                                the perception that time savings are not a
Previous research into the implications
                                                real benefit.
of electronic lodgement and settlement
estimated there are significant benefits
                                                There are also costs to practitioners
to stakeholders in the process, including
                                                under a digital lodgement and settlement
practitioners. However, practitioners have
                                                system. In 2016-17, costs to practitioners
indicated the industry is not achieving
                                                were estimated at $2.1 million including
the estimated benefits under the current
                                                $0.7 million in transition costs. The largest
system.
                                                contributor to this figure is duplication
                                                of work across the paper and electronic
PEXA commissioned Deloitte Access
                                                processes. This occurs when one side of
Economics (DAE) to undertake
                                                the transaction is not willing or able to use
independent analysis of practitioner’s
                                                the electronic system, requiring all parties
experience with the electronic system,
                                                to revert to the traditional paper process.
and to model the potential benefits to the
                                                When these costs are taken into account,
industry under a 100% digital lodgement
                                                the net benefit to practitioners in 2016-17
and settlement process.

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Executive Summary

was just $0.2 million. This is consistent with
the anecdotal evidence collected through
consultations and more broadly in the in-
dustry.                                                                   Net benefits of
                                                                        around $0.2 million
The industry is likely to experience                                        in 2016-17
increased take-up of the electronic system
in coming years as many state governments
introduce compliance dates for various
instruments. According to PEXA’s April
data, take up the system has already
increased since 2016-17, especially for
transfer transactions in Victoria (27%), New
South Wales (20%), and Western Australia
(17%). The introduction of compliance                                     2% take-up of the
dates in other international jurisdictions,                              electronic platform
such as New Zealand, resulted in improved                                    in 2016-17
uptake and increased satisfaction with the
electronic conveyancing process.

Practitioners will benefit from increased
take-up of the electronic system, with the
industry likely to realise around $89 million
per annum in net benefits from a 100%
digital lodgement and settlement process
in 2021-22.3 This figure is higher than                                    Transition costs
previous research due to the expanded                                      of $0.7 million in
scope of transactions, with the industry                                       2016-17
focussed on reaching a 100% digital
process.4,5

The electronic lodgement and settlement
platform also provides benefits to
stakeholders outside of practitioners,
such as consumers and government
bodies. For example, our consultations
                                                                             $89 million
with practitioners found that electronic
                                                                         potential benefits
platform has, on average, reduced the
                                                                          to conveyancing
frequency of delayed settlements. Just as
                                                                        industry in 2021-22
with practitioners, the potential benefits to
stakeholders in the conveyancing process
will not be fully realised until the industry
reaches 100%.

1
  This refers to the share of instruments lodged on the electronic platform for NSW, VIC, WA, QLD and SA only
2
  30% is an estimate of the current take up using actual electronic transaction data in 2016-17 and an estimate of the current industry size.
3
  This assumes a 100% digital lodgement and settlement process is reached by 2021-22 in NSW, QLD, WA, QLD, and SA.
4
  PwC (2010) and PwC (2015)
5
  Previous studies only considered electronic lodgement and settlement for the five main instruments, which accounted for around 80% of total transactions.
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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Glossary

Glossary

Acronym                  Full name

ACT                      Australian Capital Territory

ARNECC                   Australian Registrars’ National Electronic Conveyancing Council

BCR                      Benefit Cost Ratio

CAF                      Client Authorisation Form

CBA                      Cost Benefit Analysis

CAGR                     Compound Annual Growth Rate

COAG                     Council of Australian Governments

DvP                      Delivery vs Payment

ELN                      Electronic Lodgement Network

ELNO                     Electronic Lodgement Network Operator

NSW                      New South Wales

NT                       Northern Territory

OECD                     Organisation for Economic Co-operation and Development

PEXA                     Property Exchange Australia

PwC                      PricewaterhouseCoopers

QLD                      Queensland

SA                       South Australia

VIC                      Victoria

VOI                      Verification of Identity

WA                       Western Australia

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Electronic settlement and lodgement for conveyancing | Glossary

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Introduction

1. Introduction

The conveyancing industry is currently           Growth in electronic lodgement and              currently deployed. These states include
undergoing a digital transformation as           settlement is expected to increase sharply      New South Wales (NSW), Victoria (VIC),
players in the industry seek out efficiency      in the next couple of years due to the          Western Australia (WA), Queensland
gains through the use of technology.             required use of the electronic platform         (QLD), and South Australia (SA). This report
Property Exchange Australia’s (PEXA’s)           for various transactions in Western             excludes analysis on regulatory changes,
electronic platform enables lodgement            Australia, New South Wales, Victoria, and       potential implications to the structure
and settlement activities to be performed        South Australia. There are concerns in the      of the industry, and implications for
digitally. This provides a number of             conveyancing industry that the benefits of      government policy.
benefits to parties involved in a property       electronic lodgement and settlement are
transaction, including a reduction               not being realised by practitioners, and this   Our modelling found that the industry
in manual activities and increased               has implications for the industry under a       likely achieved around $0.2 million in
transparency.                                    100% digital system.                            net benefits in 2016-17. Approximately
                                                                                                 $3 million in benefits were offset by $2.1
The Council of Australian Governments            PEXA commissioned Deloitte Access               million in costs, including $0.7 million in
(COAG) recognised the potential efficiency       Economics (DAE) to undertake analysis of        transition costs. We estimate that the net-
benefits of an electronic lodgement and          current and potential future benefits of        benefits to the conveyancing industry will
settlement system, introducing electronic        electronic lodgement and settlement to the      increase to around $89 million per annum
conveyancing as part of the Seamless             conveyancing industry.                          under a 100% digital lodgement and
National Economy deregulation priorities                                                         settlement process in 2021-22.
in 2008. National e-Conveyancing                 This report provides independent analysis
Development Limited (now known as PEXA)          of the implications of the digital transition   The rest of this chapter outlines the
was created in 2010 to deliver a single,         for practitioners, including experiences        approach undertaken for this analysis and
national electronic conveyancing solution        of practitioners to date and under a likely     the structure of the report.
to the Australian property industry.             future where 100% of transactions are
                                                 conducted electronically. The analysis          1.1 Approach
Despite the potential benefits from              is focused on understanding the
electronic lodgement and settlement,             implications of a digital lodgement and         Quantifying the impact of an electronic
take-up of the PEXA platform reached             settlement system for practitioners, and        lodgement and settlement process is
just over 1.1% for lodgement of transfer         therefore does not include analysis of          undertaken by comparing the time and
instruments in 2016-17.6 This is due to high     benefits flowing to government, financial       cost differences between the electronic
transition costs for practitioners, notably      institutions, or consumers. In addition, we     and paper processes, both under current
around the steep learning curve and need         do not analyse how practitioners utilise        conditions and 100% digital uptake.
to run multiple processes. According to          benefits in terms of changes to profit          There is also consideration given to
PEXA’s April data, take up the system has        margins or customer prices.                     the interaction between the paper and
increased since 2016-17, especially for                                                          electronic processes, in particular, the
transfer transactions in VIC (27%), NSW          Our analysis focuses on the time and cost       relevant transition costs associated with
(20%), and WA (17%).                             savings for different types of practitioners    having both processes operating at the
                                                 in the states where PEXA’s system is            same time and moving to 100% electronic.

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Impacts of e-Conveyancing on the conveyancing industry - Deloitte
Impacts of e-Conveyancing on the conveyancing industry | Introduction

The benefits examined in this model are                      There are also additional monetary costs,          1.2 Report structure
focussed on benefits to practitioners.                       notably the PEXA fee.
Certain transactions are therefore not                                                                          The rest of the report is structured as
included in our analysis, such as refinancing                Transition costs associated with having to         follows:
or a standalone discharge of mortgage.                       use the paper and electronic processes
                                                                                                                •• Chapter 2: Current state of play in
                                                             in conjunction with each other, are also
                                                                                                                   the industry– provides context to the
To inform this analysis, we use a                            incorporated into the model. This focusses
                                                                                                                   project including information on the
combination of publicly available data,                      on duplicated work, which occurs for
                                                                                                                   conveyancing process, industry trends,
previous external research and information                   a proportion of cases that involve a
                                                                                                                   and previous research.
gathered from practitioner consultations,                    practitioner setting up a workspace but
workshops and an online survey.                              having to revert back to paper due to at           •• Chapter 3: Benefits from current
                                                             least one other party to the transaction not          electronic system– outlines the
In order to model the impact of an                           being on PEXA.                                        benefits achieved to date under the
electronic settlement and lodgement                                                                                current electronic lodgement and
process, this report compares activities                     A 100% digital lodgement and settlement               settlement system. This incorporates
undertaken by practitioners in the paper                     process means that activities in the                  transition costs and focusses on the
and electronic processes.                                    settlement and lodgement stages, as well              2016-17 financial year. Detailed results,
                                                             as some activities in the preparation and             including by state, are presented.
Data used as inputs to the model                             post-lodgement stages, are conducted
                                                                                                                •• Chapter 4: Benefits from 100%
were collected from consultations and                        through an electronic lodgement network
                                                                                                                   electronic system – outlines the
workshops with practitioners, survey data,                   (ELN) for all transactions. This includes not
                                                                                                                   benefits that could potentially be
and external sources of research. We                         only transfers and refinancing, but also all
                                                                                                                   achieved under a 100% digital settlement
conducted a total of 11 consultations with                   other types of transactions.
                                                                                                                   and lodgement system. This analysis
practitioners in NSW, VIC, QLD, WA, and
                                                                                                                   assumes that all instruments are
SA.7 In addition, we undertook workshops                     We do not make assumptions on how
                                                                                                                   completed under the electronic platform
with a total of 12 practitioners in WA and                   practitioners will use the benefits they
                                                                                                                   for states in scope. Results by state are
NSW. The culmination of these inputs were                    gain from a 100% digital lodgement and
                                                                                                                   also presented.
used to calculate the total benefits, total                  settlement process. This includes whether
costs and transition costs of electronic                     the cost to consumers will change, how             •• Chapter 5: Other impacts of an
lodgement and settlement.                                    practitioners use their time savings,                 electronic system – explores broader
                                                             or the nature of any potential industry               implications of an electronic lodgement
In the model, a benefit arises when the                      consolidation.                                        and settlement system. This includes
cost (time) required for a particular task                                                                         implications for fraud, settlement delays,
under the electronic process is less than                                                                          and broader benefits to the economy.
that required under the paper process.
Therefore, a cost arises when the opposite
occurs. Monetary benefits arise when a
fee can be excluded under the electronic
process, such clerk fees for settlement.

6
    This figure is based on lodgement of transfer instruments in the states where PEXA is currently deployed.
7
    Practitioners varied in terms of locality and firm type.
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Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

      2. Current state of play in
      the industry

      A property transaction is a property related                 preparation, settlement, lodgement, and                and other relevant government authorities
      deal that involves the lodgement of one                      post lodgement (Figure 2.1). Contract                  are notified of the transfer during the post-
      or more instruments with a land registry                     involves preparing the relevant contract               lodgement stage.
      in a single lodgement case. A transaction                    documents, that are then exchanged
      may involve multiple parties and include                     between parties in the preparation                     The rest of this chapter outlines trends
      financial settlement. The statutory and                      stage. Once the relevant documents are                 within the industry, including the evolution
      legal process associated with transferring                   exchanged and completed, settlement                    of electronic lodgement and settlement,
      the ownership of a title of land from one                    occurs as the property and property                    and previous studies on the benefits of
      entity to another is known as conveyancing.                  payment are exchanged. The conveyancing                such an electronic system.
                                                                   process is finalised when the settlement
      The process of conveyancing can be                           documents are lodged with the relevant
      broken down into five stages: contract,                      government bodies in the lodgement stage,

      Figure 2.1 The conveyancing process

               Contract                          Preperation                        Settlement                Lodgement               Post-lodgement
            Prepare contract                  All parties prepare                   Property and          Transfer documents           Notifications of
              documents                             relevant                          money is              are lodged with              settlement
                                               documentation                         exchanged                government                completion
                                                                                                                 bodies

          OUTSIDE PEXA – allSet up work space           Settlement funds            Done immediately                            Notices and reports
      Source:                    invite all parties. Chart
              Deloitte Access Economics
       in paper                    and                     2.1 Totaland
                                                        reserved     transactions bywith
                                                                                    state, 2016-17 in
                                                                                         settlement                             can be accessed
A’s
                            This can be done by         released for payment PEXA                                               from PEXA
                            any of the                  immediately after
                                                       1.6
                            participants.               lodgement through
                                                                   Millions

                                                        PEXA
      2.1 Overview of conveyancing industry            1.4

      In 2016-17, there were 1.5 million                                      1.2
      transactions nationally (see Chart 2.1.)
      NSW, VIC and QLD undertook the majority
                                                                              1.0
      of transactions (approximately 80% of the
      total market).8 The states covered by this
      report, which include NSW, VIC, QLD, WA                                 0.8
      and SA, accounted for 96% of total national
      transactions in 2016-17.                                                0.6

                                                                              0.4

                                                                              0.2

                                                                              0.0
                                                                                   AUS            NSW              VIC              QLD            WA        SA
                                                                    Source: BIS Oxford Economics, State Land Registries, Deloitte Access Economics

      8
          This figure uses BIS Oxford Economics estimates of events and dealings to calculate national transactions.
      7
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Transactions have been growing at                            Chart 2.2 Growth in transaction volumes
compound annual growth rate (CAGR) of
4.4% since 2011-12. This has been driven                     Year-on-year change
by strong housing activity in NSW, VIC and
QLD (below Chart 2.2). Growth in total
                                                              15%
transactions nationally decelerated to 1.2%
in 2016-17, with demand for housing and
                                                              10%
subsequent transactions volumes in these
three states slowing in the latter half of the
year.                                                           5%

The underlying driver of transactions                           0%
is population growth and subsequent
household formation. As the population                         -5%
expands and the number of households
grow, the level of property demand and
                                                             -10%
transactions follow. The housing cycle also
provides short-term, cyclical fluctuations
                                                             -15%
to underlying demand. This is driven by
changes to employment, income, interest
rates, investor sentiment, and foreign                       -20%
exchange rates. These changes impact a                                 2008-09                 2010-11                 2012-13                 2014-15                2016-17
                                                                                                  AUS            NSW             VIC           QLD
household’s ability to borrow and purchase
property, flowing through to demand for
                                                             Source: BIS Oxford Economics, State Land Registries
conveyancing services.

Conveyancing requires a number of legal
forms/documents or instruments to be
completed for a property transaction. For
example, common instruments in the sale
of a property include a transfer, discharge
of mortgage and mortgage (Figure 2.2).9

9
  It is important to note that transactions and instruments are treated differently in PEXA’s reporting. Transactions within the PEXA system typically refer to individual billing
events and means that in one workspace, the purchase of a property can lead to 4 PEXA transactions because there are four parties involved (two practitioners and two
financial institutions). The transactional data sourced from PEXA in this report reflects these differences.
8
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Figure 2.2 Transactions and instruments

                                                                            Transactions

                                      A transaction is a property-related deal that involves a number of parties and activities

                                                                      Main transactions
                                Sale/transfer                                                                          Refinancing

    A sale/transfer is the legal process of changing the ownership of a                  Refinancing is the process of revising the terms of a mortgage or loan.
    property from a seller to a buyer.                                                   Revising terms typically relates to changing banks, the interest rate
    Common instruments involved in this transaction include a transfer,                  charged and the repayment schedule on a loan.
    discharge of mortgage and mortgage.                                                  Common instruments involved in this transaction include a discharge
    This type of transaction represents 50% of total transactions in                     of mortgage and mortgage.
    Australia.                                                                           This type of transaction represents 17% of total transactions in
                                                                                         Australia.

                                                                            Instrument

                        An instrument is a form lodged with the Land Titles Office which changes information on a property’s title. Multiple
                                                     instruments are typically completed each transaction.

                                                                          Main instruments

                    Transfer                    Mortgage                     Discharge                     Caveat                       Other

                 Transferring the
                                              Assigning a                    Releasing a               Notice that an              Includes change
               rights of a property
                                           mortgage against a             mortgage assigned             interest on a               of name, death
                 between two or
                                               property                     to a property            property is claimed              notice, etc.
                   more parties

Source: Deloitte Access Economics

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Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Sales/transfers and refinancing are the two          discharged. In addition, there are a number          have appropriate infrastructure in place
main types of transactions in conveyancing,          of government bodies involved in the                 to offer the same service at a lower cost,
accounting for 67% of total national                 process, including the land titles office, the       has placed downward pressure on the
transactions in 2016-17 (Chart 2.3).                 office of state revenue, and local councils.         profitability of conveyancing services
                                                                                                          (Rose, 2012). Conveyancing has a lower
Each transaction typically involves one              In QLD and the Australian Capital Territory          profit margin compared to other services
or more instruments, with transfers,                 (ACT), conveyancing work can only be                 provided by legal firms, but the continuous
discharge of mortgage and mortgage                   undertaken by a lawyer under state laws.             flow of work provides an ongoing stream of
instruments accounting for the largest               There are around 12,000 businesses which             revenue that supplements more profitable
share of instruments in 2016-17, at around           undertake conveyancing work across                   activities undertaken by the firms (DAE
85% (Chart 2.4).                                     Australia, with the industry characterised           practitioner consultations, 2018). While
                                                     by a large number of small operators                 the continuous flow of work and short
Generally, there are four key players in a           (IBISWorld, 2017).                                   timeframe provides incentives to perform
transfer; the purchaser’s conveyancer and                                                                 conveyancing work for operators in the
bank, and the vendor’s conveyancer and               A gradual expansion in the number of                 industry, there is a focus on streamlining
bank (Figure 2.3). The financial institutions        firms operating in the conveyancing                  activities to improve efficiency.
are involved when a mortgage is created or           market, especially larger law firms that

Chart 2.3 Volumes by transaction type, 2016-17                                Chart 2.4 Volumes by instrument type, 2016-17

                                                                                                  10.7%

                                                                                         2.4%                               25.4%
                                                                                     1.5%
     33%

                                                     50%

                                                                               29.3%

                                                                                                                             30.7%
           17%

  Sales/transfers         Refinancing        Other                              Transfers                   Discharge of mortgage    Mortgage

                                                                                Withdrawal of caveat        Caveat                   Other

Source: BIS Oxford, State Land Registries                                     Source: BIS Oxford, State Land Registries

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Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Figure 2.3 Key players in a transfer                2.2 Development of electronic                        •• Lodge settlement documents in person
                                                    conveyancing                                            at the land titles office.

Purchaser’s              Vendor’s                                                                        •• Notify other relevant authorities of the
conveyancer            conveyancer                  Under the traditional, or paper based
                                                                                                            transaction. In the case of a transfer,
                                                    method of conveyancing, a practitioner is
                                                                                                            this will likely involve sending a notice of
                                                    required to undertake the following high-
                                                                                                            acquisition and rates payments to the
                                                    level tasks (Figure 2.4);
                                                                                                            council and water authority, respectively.
                                                    •• Complete verification of identity (VOI)
                                                                                                         The tasks are time intensive, with
                                                       and client authorisation form (CAF),
                                                                                                         practitioners potentially spending
                                                       and prepare, negotiate and exchange
                                                                                                         45 minutes on the phone to financial
              Property                                 contract with client. The CAF enables a
                                                                                                         institutions and up to an hour travelling to
              transfer                                 practitioner to act on behalf of a client by
                                                                                                         settlement (DAE practitioner consultations,
                                                       signing and approving documentation.
                                                                                                         2018). In addition, there are often delays as
                                                    •• Prepare and exchange relevant                     the process of exchanging physical forms
                                                       documents with other parties involved in          can take, on average, 4.25 hours in a sale/
                                                       the transaction.                                  transfer.

                                                    •• Book settlement time, provide
                                                       adjustments and confirm financial
  Purchaser’s            Vendor’s
     bank                  bank
                                                       settlement details with other parties.

Source: Deloitte Access Economics

Figure 2.4 Conveyancing process under traditional paper method

                      Contract                    Preperation               Settlement                    Lodgement              Post-lodgement
                   Prepare contract            All parties prepare          Property and              Transfer documents          Notifications of
                     documents                       relevant                 money is                  are lodged with             settlement
                                                documentation                exchanged                    government               completion
                                                                                                             bodies

                Complete verification     Parties prepare            Confirm and                 Lodge settlement          Notifying other
                and authorisation         documents –                exchange money              document with land        relevant authorities
Main
                forms, and prepare,       contracts, loans, land     and settlement              title office              of transfer and
activities
                negotiate and             transfer, other            documents                                             providing final report
                exchange contract         relevant instruments                                                             to client

Source: Deloitte Access Economics

11
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

In the mid-2000s, both the Victorian                conveyancing process was not productive      The Australian Registrars’ National
and New South Wales Governments                     and imposing excessive compliance costs      Electronic Conveyancing Council (ARNECC)
began to work on improving the time                 on business (ARNECC, 2011). Former           was established in 2011 to implement
and cost efficiencies of the conveyancing           Chairman of COAG, John Brumby, is            and manage the regulatory framework
process. VIC developed the Electronic               quoted as saying: “The origins of this       for electronic conveyancing in Australia.
Conveyancing Victoria (ECV) solution,               process are all about transforming the       All dealings conducted through electronic
while NSW established the National                  way governments and business work.           conveyancing are regulated by the Model
Electronic Conveyancing Office (NECO).              [E-conveyancing] will transform and reduce   Participation Rules, as set by ARNECC.
These initiatives motivated the call for a          regulatory burden, the amount of time with   These rules set out a range of obligations
national initiative to improve the overall          lawyers, conveyancers and the like: really   that conveyancers must follow when
conveyancing process for all participants.          modernising the system.” (PwC, 2015, p.24)   engaging in electronic conveyancing,
                                                                                                 stipulating that subscribers must comply
In 2008, the Council of Australian                  As a result, a commercial entity was         with these rules at the time of applying and
Governments (COAG) agreed to introduce              established in 2010, now known as            whilst being a subscriber to the electronic
electronic conveyancing as one of the 27            Property Exchange Australia (PEXA), with     conveyancing system.
Seamless National Economy deregulation              the aim of designing and implementing a
priorities. Electronic conveyancing was             national e-conveyancing platform. PEXA
identified as one of these priorities               operated this ELN as Australia’s first
because the lack of consistent regulation           electronic lodgement network operator
across jurisdictions meant that the                 (ELNO).

12
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

2.3 The PEXA platform                               The use of PEXA’s platform for completing
                                                    lodgement and property settlements
Since its establishment, PEXA has focussed          means that lawyers, conveyancers, financial
on developing an online platform for the            institutions and land registries can interact
settlement and lodgement of land transfers          and share information online, removing
nationally. The platform provides a secure          the need for bank cheques and physical
online portal to an electronic workspace            exchanges of documents. This addresses
where registered parties can complete and           inefficiencies in preparation, settlement
lodge documents, verify duty and transfer           and lodgement activities. An overview of
funds, and settle the transfer of a property        PEXA’s role in the conveyancing process is
in real time.                                       outlined in Figure 2.5.

Figure 2.5 The conveyancing process under digital lodgement and settlement

                      Contract                    Preperation               Settlement                  Lodgement            Post-lodgement
                   Prepare contract            All parties prepare          Property and            Transfer documents        Notifications of
                     documents                       relevant                 money is                are lodged with           settlement
                                                documentation                exchanged                  government             completion
                                                                                                           bodies

                Outside PEXA – all in     Set up work space          Settlement funds            Done immediately        Notices and reports
                paper                     and invite all parties.    reserved and                with settlement in      can be accessed
PEXA’s
                                          This can be done by        released for payment        PEXA                    from PEXA
role
                                          any of the                 immediately after
                                          participants.              lodgement through
                                                                     PEXA

Source: Deloitte Access Economics

13
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Currently, PEXA is the only electronic                  The use of the PEXA platform will reduce                    enabled in NSW and VIC by 2019. Although
lodgement and settlement platform                       er- rors that can lead to unexpected                        the ACT is not a party to the COAG
available with the possibility of competing             delays in settlement. Practitioners noted                   agreement, PEXA has started engaging the
platforms being introduced in coming                    during con- sultations that conveyancing                    local land registry. PEXA expects to roll out
years. The system is focussed on electronic             services are being delivered with fewer                     its platform to TAS, NT and ACT by 2022.
lodgement and settlement, with some                     postponements and buyers can prepare                        However, this target relies on relevant state
minor activities within the preparation                 to move into prop- erties within agreed                     government funding.
stage also able to be conducted via the                 timeframes with greater certainty
electronic platform. It is available in NSW,
VIC, QLD, SA and WA, jurisdictions which                Figure 2.6 illustrates the intended timeline
account for 96% of Australia’s lodgement                for the rollout of PEXA’s electronic platform.
volumes (PEXA, 2017).                                   Digital lodgement for all transactions will be

Figure 2.6 Indicative timeline of electronic platform rollout

                                                                                  Enable
                                                                                 residual                   100% digital
                                                All existing                                                 lodgement
                                                    PEXA                      documents in
                                               instruments                    all states for                 enabled in
       Mortgage/                                                                                                QLD
                                  Transfers       in SA +                         digital                                    Rollout of
       Discharge                   in VIC         Priority                     lodgement                                      existing
       in NSW &                                   Notices                                     Rollout of                       PEXA
          VIC           Caveats                                                             existing PEXA                  instruments
                         in VIC                                                            instruments in                  in TAS & NT
                                                                                                  ACT

         2013         2014         2015       2016        2017         2018            2019          2020         2021

                         Transfers in                Simultaneous
                            NSW                       Settlements
                            RBA        All  existing              Mortgages
                         Settlement         PEXA                  nationally                100% digital
                                      instruments                                            lodgement
                                        in QLD &                                             enabled in
                                           WA +                              Transmissions
                                                                             and Notices of  NSW  & VIC
                                       Settlement
                                         Notices                             Death in Qld,
                                           (QLD)                              NSW, SA &
                                                                                 VIC

Source: PEXA (2017)

14
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Uptake of electronic lodgement and                            Chart 2.5 Take-up rates of PEXA platform by instrument type*
settlement has risen significantly for many
transactions. For instance, caveats lodged
                                                              25%
electronically accounted for 20% of all
caveats lodged in the selected states in
2016-17, led by VIC. However, transfers,
which account for over 50% of total                           20%
transactions in the industry and have the
most opportunity for lower costs, had an
electronic take-up of only 1.1% in 2016-17
(see Chart 2.5). According to PEXA’s April                    15%
data, take up the system has increased
since 2016-17, especially for transfer
transactions in VIC (27%), NSW (20%), and
                                                              10%
WA (17%).

The steep learning curve for practitioners
has deterred many conveyancing operators                        5%
from transitioning to the electronic
process. In addition, with both the paper
and electronic processes operating at the
                                                                0%
same time, if one party is not on the PEXA
                                                                            Caveat             Mortage            Discharge            Transfer              Others
system, then the transaction must be
performed through the paper process. This
                                                              Source: PEXA data request, Deloitte Access Economics
creates inefficiencies within the system,
and limits the number of transactions that                    *Take-up rates are for conveyancers and solicitors only
can occur electronically. For example, if
30% of all practitioners have the system
and are willing to use it, the probability of                 State governments continue to pursue                       some state governments have required
a transfer transaction being completed                        efficiencies in the conveyancing industry                  certain instruments to be lodged
electronically is less than 10%.10 Not all                    through electronic settlement and                          electronically. The timeline in Table 2.1
instruments are available on the system,                      lodgements, but recognise the problems                     outlines the various compliance dates for
and this further reduces the probability of a                 a dual system creates. In a bid to improve                 these instruments.
transaction being completed electronically.                   take-up and maximise efficiency gains,

10
     This example uses 30%, which is an estimate of the current take up using actual electronic transaction data in 2017 and an estimate of the current industry size
15
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

Table 2.1 Compliance timeline for electronic lodgement and settlement

Instrument                                                      WA#               VIC            NSW+***    SA

Standalone mortgage discharges                                  Aug-16**          Aug-16**       Mar-17**   Apr-17

Standalone mortgages (consumer)                                 Aug-16**          Aug-16**       Mar-17**   Apr-17**

Standalone mortgages (commercial)                               Dec-17            Aug-17**       Aug-17**   Q4-17*

Refinances                                                      Dec-17            Aug-17**       Aug-17**   Q4-17*

Standalone caveats                                              Dec-18            Dec-17^        Jul-18     -

Standalone withdrawals of caveats                               Dec-18            Dec-17^        Jul-18

Non-ADI discharges, mortgages and                               -                 Dec-17^        -          -
refinance

Standalone transfers                                            Dec-18            Mar-18^        -          -

Standalone survivorships                                        -                 Mar-18^        Jul-19     -

All combinations of discharge, transfer and                     -                 -                         -
mortgage transactions

All combinations of transactions in PEXA                        Dec-18            Oct-18^                   -

All transactions                                                -                 Aug-19^        -          -

Source: PEXA (2017)

*Dates still to be confirmed
**Where the mortgagee is an Authorised Deposit-taking Institution only
+Excludes mortgages with bespoke terms over 4,000 characters
***Excludes out of scope titles
^If a party is a subscriber or is represented by a lawyer/conveyancer
# In-scope transactions only

16
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

2.4 Previous analysis of electronic                 benefits through Computable General             experiences as other international
conveyancing                                        Equilibrium modelling. It was estimated         jurisdictions. These experiences are drawn
                                                    that the PEXA platform would result in          upon in this report. For example, in New
The benefits of an electronic conveyancing          a 0.05% increase in productivity for the        Zealand, forcing practitioners to transition
platform have been explored previously,             financial institutions sector, resulting in a   through compliance dates improved
both here in Australia and internationally.         $259 million gain in real GDP, $314 million     the uptake and proficiency of electronic
                                                    increase in total annual national household     conveyancing.
2.4.1     Previous Australian analysis              income, and a $182 million increase in total
                                                    annual national wages (in 2013-14 prices).      New Zealand’s electronic conveyancing
PwC (2010) updated the size of the                                                                  system was introduced in 2002 after
potential revenue opportunity for a                 Both of these PwC studies focussed              recognition that the expanding number
national e-conveyancing platform, and the           on estimating benefits for a subset of          of paper-based systems were becoming
potential intellectual property that could          transactions, accounting for approximately      “increasingly cumbersome” (Muir, 2007).
be leveraged. The report estimated that a           76% of all transactions annually.               Initially, the uptake of the digital system
national electronic conveyancing business                                                           was slow, due largely to the upfront
(including booking, preparation, settlement         A report by KPMG (2018) focused on              investment in training and IT that was
and lodgement) could provide stakeholders           analysing potential benefits to practitioners   required. However, from 2009, the
with ~$220m-$248m of potential gross                in NSW from electronic conveyancing,            government required all lodgements of title
benefits, shared across consumer,                   providing a quantification of current time      transactions to be made electronically with
practitioners and banks. Of these benefits,         costs and benefits under the paper and          limited exceptions.
approximately $60 million accrue to                 electronic processes to conveyancers
practitioners. This analysis did not take into      and lawyers. The report estimated that          The response from practitioners was
account any additional costs for using the          for a vendor’s (purchaser’s) lawyer or          positive with satisfaction levels increasing
electronic system.                                  conveyancer using the electronic system,        from 48% in 2005 to 80% in June 2009
                                                    3.25 (4.25) hours could be saved per            (PwC, 2010) and by 2012-13, only 2% of
PwC (2015) updates these findings, with             transaction in the post-preparation stages      transactions were conducted through the
the net benefits of fully implementing PEXA         of the conveyancing process. This meant         paper process (PwC, 2015). As a result, New
to consumers, business and government               that post-preparation activities could be       Zealand is considered the most efficient
estimated at $184 million in 2017-18. The           performed in 60-70% of the time observed        global economy for registering property in
direct net benefits to practitioners was            under the paper process.                        terms of cost and time (World Bank, 2017).
forecast as $20.1 million in 2017-18, with                                                          In comparison, Australia is ranked 51st.
approximately $72.7 million in benefits and         2.4.2     International experience
$52.6 million in costs. In addition to the                                                          Canada also experienced similar
direct benefits to the various stakeholders,        The Australian conveyancing industry            improvements in the uptake of electronic
PwC also examined the broader economic              is currently going through the same             conveyancing. The electronic land

17
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

registration system in Ontario               2.4.3     The scope of this report
was first developed in the 1990s
and quickly gained traction, with            Our analysis expands on previous
99.9% of transactions conducted              studies by providing an in-depth
electronically by 2011 (Teranet, 2014).      analysis of the benefits to date
Although government legislation              and potential benefits from 100%
which pushed practitioners to move           electronic lodgement and settlement
away from the paper process was              in Australia. In particular, our analysis
important, the integration of the            differs from previous studies in the
platform with related services from          following ways:
the state revenue office and financial
                                             •• Capturing the current time and
institutions proved equally effective
                                                monetary costs and benefits for
(GhostDigest, 2011).
                                                NSW, as well as VIC, QLD, WA and
                                                SA.
These examples are primarily
e-lodgement platforms. It is                 •• Identifying and quantifying the
important to note that PEXA has                 transition costs associated with
delivered a national e-settlement               having the paper and electronic
and e-lodgement platform for                    processes running at the same
real property. The platform offers              time.
Delivery vs Payment (DvP) with no
                                             •• Estimating the total net benefits
person holding funds and title at
                                                of a 100% digital lodgement and
the same time, delivering benefits
                                                settlement process by 2021-22 for
and efficiencies not realised in these
                                                practitioners in the states identified
other jurisdictions.
                                                above.

18
Impacts of e-Conveyancing on the conveyancing industry | Current state of play in the industry

19
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3. Impacts of current
electronic system

The current electronic platform for                        The relatively small net benefits are
settlement and lodgement provides                          consistent with survey findings from
a number of benefits to practitioners                      practitioners.12 Despite significant benefits
compared to the paper based process,                       for completing a transaction on the
mostly in the form of time savings, which                  electronic platform, the low take-up rate
are partially offset by the platform’s fee.                has prevented access to these benefits
Practitioners have also faced transition                   (see Table 3.2). Benefits are further limited
costs from moving towards the electronic                   by transition costs, mostly related to dual
system, mostly in the form of duplicate                    processes.
processes across both the paper and
electronic systems.                                        This remainder of this chapter explores
                                                           these results in more detail, including state
Our modelling indicates the conveyancing                   analysis.
industry achieved a net benefit of around
$205,000 in the 2016-17 financial year
from the current electronic conveyancing
system (see Table 3.1).11

Table 3.1 Economic modelling results for current electronic system, 2016-17

         Benefits                      Costs                Transition costs               Current net
                                                                                            benefits

          $3.0m                        $2.1m                       $0.7m                       $0.2m

Source: Deloitte Access Economics analysis

Table 3.2 Instruments lodged in selected states, 2016-17

      Total number                Electronically            Platform take up
        of lodged                    lodged                       rate
      instruments                 instrumentd

           2.2m                       42,655                        2.0%

Source: Deloitte Access Economics analysis, BIS Oxford Economics

11
     Analysis on benefits and costs was undertaken for NSW, VIC, QLD, WA, and SA only. This represents 96% of the total market.
12
     The survey found 78% of conveyancers reported the cost of electronic lodgement and settlement was around the same level as the manual process.

20
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3.1 National results                                        financial institutions ensuring funds are         practitioners choose to pay for junior
                                                            available before settlement date. Our             clerks or external settlement agents
Time savings throughout the preparation,                    consultations reveal that a practitioner          to attend settlement on their behalf.
settlement and lodgement stages of the                      can spend up to 30 minutes on the                 Consultations and workshops revealed
conveyancing process contribute heavily                     phone to confirm that loan funds are              that the use of settlement agents was
to these net benefits. Our results suggest                  available from a mortgagee.                       extensive, and therefore modelled
that for a transfer, an average of 3.7 hours                                                                  explicitly. However, these costs were
                                                          •• Time editing documents within
is saved by practitioners per transaction                                                                     estimated at around the same cost of
                                                             the platform. The current system
nationally under the electronic process.                                                                      staff members attending.
                                                             requires information from all parties to
                                                             be matched before a transaction can            •• Time spent travelling and attending
The time savings also depend on whether
                                                             be completed. This reduces the amount             to lodgement. Lodgement of transfer
the practitioner is on the purchaser or
                                                             of errors requiring rework, as fields             of land title, mortgage and discharge
vendor side. The average time savings per
                                                             are matched before proceeding to the              takes place automatically through the
transaction for a purchaser’s practitioner
                                                             next state in the process. Practitioners          electronic platform. In our consultations,
is 4.0 hours and 3.3 hours for the vendor’s
                                                             estimated that 10% of paper transactions          an average of 30 minutes was spent
practitioner.13
                                                             involve a minor error that can prevent            travelling to and from the land titles office
                                                             settlement from taking place on the               as well as submitting relevant documents
3.1.1         Benefits
                                                             same day. This can be a result of difficulty      to the land titles office.
                                                             making the edits to the documents
The benefits of the current electronic
                                                             and rebooking settlement, especially           There are also financial benefits from
system are just over $3 million in the
                                                             for metropolitan-based practitioners.          moving towards the electronic system
2016-17 financial year. This is based on time
                                                             Reduced settlement delays also provides        with a reduction in the cheque fees. For a
savings of the electronic system compared
                                                             benefits to consumers however this is          number of practitioners, a certain amount
to the paper based process and includes
                                                             out of scope for our analysis.                 of cheques – around 3 – are included
the following activities:
                                                                                                            in their fees to their client. However, a
                                                          •• Time travelling to settlement. This
                                                                                                            number of practitioners did still require
                                                             can be a significant investment of
•• Time spent on the phone to financial                                                                     additional cheques if there were more
                                                             time, especially for regionally located
   institutions and other practitioners                                                                     payments required. The average number
                                                             conveyancers. In our consultations, for
   booking settlement. There can be                                                                         of cheques required for a transaction is 7
                                                             example, conveyancers located outside
   significant time waiting on hold for                                                                     at about $10 per cheque which diminishes
                                                             of metropolitan areas were travelling an
   financial institutions to set dates for                                                                  the margin for each transaction (KPMG,
                                                             average of 2 hours there and back for
   settlement and coordinating with other                                                                   2018). Consultations revealed that this
                                                             settlement.
   parties to ensure availability. In our                                                                   cost was often borne by the practitioner.
   consultations, for example, we found that              •• Time spent attending settlement.               Through the electronic system the need
   conveyancers and lawyers can spend                        This can involve waiting at financial          for these cheques is not required. The time
   up to 45 minutes on hold with financial                   institutions or settlement locations           saving benefits are partially offset by time
   institutions. Even though work can still                  for other parties and completion of            spent by practitioners entering information
   be completed while on hold with financial                 settlement, which can take up to 30            into the electronic system and sending
   institutions, there is a productivity                     minutes for the average practitioner.          across workspace invitations. Although
   decline expected during this time.                        Yet if one party does not show up and          these activities only take an average of
                                                             the parties in attendance have other           10 minutes, they have reduced the time
•• Time spent confirming loan funds
                                                             settlements to attend to, the settlement       savings included in the analysis.
   are available from mortgagee.
                                                             will need to be rescheduled to the
   Under an electronic system, there is no
                                                             afternoon or on another day. Some
   need to spend time on the phone to

13
     These are a weighted average based on the number of PEXA lodgements completed by each state.
21
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3.1.2     Benefits realisation                     electronic lodgement and settlement           A number of transactions revert to a paper
                                                  process. The electronic process involves       process after initiating the electronic
Experiences of using the electronic               signing documents by senior staff, a           process. Through our consultations, this
platform are varied, and there are a              level of oversight that was not required       was estimated at over half of all electronic
number of factors that are preventing             in the paper based system. Consultation        transactions. This figure does vary
some practitioners from fully realising           revealed that this may be partially offset     substantially for individual practitioners.
the benefits. A key factor is that at             as the electronic system becomes more          Industry consultations revealed that
current low levels of take-up of                  familiarised.                                  some practitioners will not begin activities
electronic lodgement and settlement,                                                             on the platform until all parties have
with only 2% of eligible lodgements               3.1.3      Costs                               accepted the invitation to the electronic
being completed on the platform in                                                               workspace. Others will send invitations
2016-17. The lack of ongoing exposure to          The current costs for practitioners using      for all transactions and will run both the
the electronic platform means that                the electronic platform are the platform       electronic and paper based process to
efficiency gains from mastering the               fees. Currently these are $110.55 for a        mitigate any risk of reversion back to
system are not fully realised even when           transfer title, which make up the majority     paper process that could cause delays to
a transaction is completed via the                of electronic lodgements for practitioners     settlement.
platform.                                         (19%). There are other fees, such as
                                                  caveats and withdrawals of caveats, which      Another transition cost for conveyancing
Another significant factor is that other          cost $29.92 and $15.51 respectively and        practitioners is learning to operate the
related parties to the conveyancing               have been included in the analysis. These      platform. PEXA provides support services
process, such as financial institutions,          instruments make up 50% of instruments         face-to-face or over the phone for those
are not prepared for the demand in                lodged through the platform.                   completing transactions. Consultations
transactions conducted through the                                                               with industry practitioners and support
platform. This means there can be                 Consultations revealed that fees for           staff report that learning to operate
delays for practitioners when waiting for         mortgages and discharges are often             the system requires regular use of the
documents such as discharge documents             borne by financial institutions. These may     system. When there is regular use of the
or loan contracts. Ultimately this means          be passed onto purchasers and sellers.         system practitioners state that it takes
practitioners are spending additional time        For the purposes of this report, fees for      2-3 transactions to know the system
following up financial institutions to receive    mortgages and discharges therefore not         proficiently. This transition cost is not
documents, reducing the time savings              included in the analysis, which is focused     included in the model as the delay was
benefits.                                         on the implications for conveyancing           considered minimal.
                                                  industry only.
Consultations also highlighted that                                                              Providing assistance to practitioners on
many practitioners do not perceive time           3.1.4      Transition costs                    the other side of the transaction is another
savings as a monetary benefit. A common                                                          transition cost cited by practitioners.
response during discussions was that              Our modelling indicates that transition        While PEXA provides support services for
practitioners are looking forward to              costs of moving to the electronic system       practitioners, many proficient practitioners
“getting their evenings back” when digital        amount to $0.7 million, or 23% of the          will provide assistance to new users of the
conveyancing is implemented fully. In             benefits from using the platform. Transition   system. This is especially true when the
this sense, practitioners are not explicitly      costs are the costs of moving towards the      practitioner advocates using the platform.
valuing the time they spend during the            electronic platform. For practitioners that    This was not quantitatively captured by the
evenings as a cost.                               have currently adopted the platform, this      model as it substantially varies depending
                                                  includes an average cost of $69 each time      on the case.
A fourth factor that can affect realisation       a practitioner begins a transaction in the
of benefits is the share of tasks completed       platform but needs to revert back to the
by junior staff compared to more senior           paper process.
staff in the paper process compared to the

22
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3.2 State results                                  electronically, which results in significant       •• Differences in take-up rates of the
                                                   time savings for practitioners. Meanwhile             platform;
Table 3.3 presents the modelling results for       there are only small benefits for SA and
                                                                                                      •• Slight variations in the conveyancing
practitioners currently using the electronic       QLD. This is unsurprising given the size of
                                                                                                         process between states which results in
system in each state.                              the market in each of these states.
                                                                                                         different time savings; and

NSW and VIC, the two largest property              The industry in WA is experiencing no net          •• Differences in share of lodgements
markets in Australia by lodgement volume,          benefits from electronic lodgement and                completed electronically by conveyancers
account for the largest share of the current       settlement, with industry net benefits of             or lawyers.
net benefits of using the platform. Victoria       -$36,000 for the 2016-17 financial year.
has a higher share of current benefits due         The main reasons for the variation in state
to a large share of caveats being lodged           benefits include:

Table 3.3 Economic modelling results for current practitioners using electronic platforms by state

State                                         Benefits                   Costs                    Transition            Current net
                                              ($’000s)                  ($’000s)                    costs                benefits
                                                                                                   ($’000s)               ($’000s)

NSW                                                  $1,314                     $934                     $356                      $23

VIC                                                 $1,204                      $816                     $198                     $189

SA                                                    $128                       $89                      $24                      $15

QLD                                                    $83                       $55                      $16                      $15

WA                                                    $315                      $251                     $101                     -$36

Total                                               $3,045                    $2,144                     $696                     $205

Figures may not add due to rounding
Source: Deloitte Access Economics analysis

23
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3.2.1   Variation property                            Chart 3.1 Share of electronic lodgements by state
transactions and take-up
                                                                      7%      2%
Take-up rates of the platform are a key
                                                               5%
determinant of net benefits across the
states. Table 3.4 below shows large
variation between states in these take-up                                                             32%

rates.

The highest take-up rate of the platform
is in VIC, NSW and WA with the three
accounting for 93% of in-scope electronic             54%
lodgements (see Chart 3.1). These states
have implemented compliance dates for
certain instrument types to be completed
on the electronic platform which has
encouraged growth in the take-up of                          NSW     VIC       QLD       WA      SA
electronic lodgements.

                                                      Source: PEXA data request and Deloitte Access Economics analysis

Table 3.4 Total and electronic lodgements by state

State                                            Lodged                    Electronically               Platform
                                              instruments                      lodged                 take up rate
                                                                            instruments

NSW                                                   683,294                        13,753                     2.0%

VIC                                                   625,853                        23,237                     3.7%

SA                                                     147,181                         975                      0.7%

QLD                                                   518,898                         1,960                     0.4%

WA                                                    205,641                         2,922                     1.4%

Total*                                              2,180,867                      42,846                       2.0%

Figures may not add due to rounding
*Instruments lodged are for conveyancers and practitioners
Source: PEXA data request, BIS Oxford Economics

24
Impacts of e-Conveyancing on the conveyancing industry | Impacts of current electronic system

3.2.2      Variation in time savings                        For instance, SA has the largest time
                                                            savings of any state with almost 4 hours
Part of the variation in benefits faced                     saved through the process in total (Table
by each state is determined by the time                     3.5). This is partly attributable to the
saved during a transaction through using                    fact that SA only has one location for
the electronic platform. These variations                   settlement, so any delays or errors prior to
in time savings were developed through                      settlement are exacerbated given limited
consultations with practitioners in each                    availability for re-booking.
state and confirmed through the survey.

Table 3.5 Average time savings for using electronic platform

State                                           Time saving                  Time spent                Net time savings
                                                   (hrs)                    transitioning                    (hrs)
                                                                                (hrs)

NSW14                                                 3.8                           1.2                          2.5

VIC                                                   3.6                           1.1                          2.6

SA                                                    4.7                           0.9                          3.9

QLD                                                   3.6                           0.7                          2.9

WA                                                    3.5                           0.8                          2.8

Source: Deloitte Access Economics analysis

3.2.3   Difference in lawyers and                           difference in the average salary for a lawyer              allows practising lawyers to operate in
conveyancers undertaking the                                compared to a conveyancer was over                         their state and does not allow licensed
transaction                                                 $22,000.15 This leads to differences in the                conveyancers from interstate to operate
                                                            dollar value of time savings for the types of              within their jurisdiction. On the other
The type of practitioner completing the                     practitioner.                                              end of the spectrum, the majority of
conveyancing transaction can have an                                                                                   electronic lodgements completed in WA are
impact on the size of benefits derived by                   For each state, there are varying shares                   completed by conveyancers, or settlement
each state. This is a result of the difference              of lawyers and conveyancers completing                     agents.
in hourly wages between a lawyer and                        lodgements through the platform (Chart
conveyancer. For instance, in NSW the                       3.2). The Queensland Government only

14
   Previous research estimates that NSW average time savings was 3.25 hours for vendors’ practitioners and 4.5 hours for purchaser’s practitioners. with an average time
approximately the same as the average estimated in our modelling
15
   Payscale (2018). Payscale salary survey. Available at: https://www.payscale.com/my/survey/choose.
25
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