Often taking up to 30 days to complete, conveyancing is a complex process during which buyers and sellers can experience numerous setbacks associated with delays in financial approval or settlement, manual processing errors, and late submissions. It is inefficient and time-consuming, and, until recently, it was the only system available for the legal transfer of property in Australia.
However, the Australian conveyancing industry is undergoing a digital transformation sparked by the establishment of an electronic lodgement and settlement system – e-conveyancing.
Part of the broader digital transformation of the Australian economy, e-conveyancing eliminates the manual processes and paperwork associated with property settlement by enabling lawyers, conveyancers and financial institutions to transact together via an online property exchange.
As e-conveyancing continues to roll out nationally, Deloitte Access Economics was engaged by PEXA (Property Exchange Australia) to undertake an independent analysis of practitioners’ experiences of e-conveyancing, and to evaluate the potential benefits to the industry of embracing a 100% digital lodgement and settlement process.
To quantify the impact of an electronic lodgement and settlement process, we compared the time and cost differences between the electronic and paper processes, under current conditions and with 100% digital uptake. Consideration was also given to the interaction between the paper and electronic processes, in particular, the relevant transition costs associated with having both processes operating at the same time.
To inform this analysis and accurately model the impact of an electronic settlement and lodgement process, we conducted a total of 11 consultations with practitioners in NSW, Victoria, Queensland, WA and SA. In addition, we undertook workshops with practitioners in WA and NSW.
We used the results of these practitioner consultations and workshops, along with a combination of publicly available data, previous external research and an online survey, to calculate and model the total benefits and costs of electronic lodgement and settlement, including transition costs.
From our analysis, we estimate Australian property industry practitioners could stand to benefit to the tune of approximately $89m per annum if a digitised lodgement and settlement process achieved 100% uptake by 2021–22.
Our research indicates that one of the biggest costs to practitioners under the current system is duplication of work across the paper and electronic processes. This occurs when one party is unable or unwilling to conduct the transaction electronically and all remaining parties must therefore revert to the paper process. We estimate costs will fall substantially as the duplication of work eases and practitioner uptake increases. The longer the industry takes to transition to e-conveyancing, the longer practitioners will encounter this cost.
Once full digital adoption has occurred, we believe the property industry will benefit from significant efficiency gains and cost savings.
John O’Mahony is partner at Deloitte Access Economics,
specialising in the digital economy and how it is changing business, government and everyday life
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