Keynote Address to the Committee for Melbourne, Melbourne Summit 2024

Delivered by PEXA Managing Director & CEO, Glenn King

I would like to begin by thanking Committee for Melbourne CEO, Mark Melvin, and the entire Committee for Melbourne team, for hosting this event today.

I extend a warm welcome to the Victorian Deputy Premier Ben Carroll, City of Melbourne Lord Mayor, Sally Capp AO, and distinguished guests.

Ladies and gentlemen, I’m pleased to be here at this important event, as we join for the launch of the Committee for Melbourne’s 2024 Benchmarking Melbourne Report.

It comes as no surprise that issues surrounding housing affordability are a key finding of that report – an issue which we are seeing across all major capital cities and regional towns.

I will talk more about housing affordability.

But first I wanted to take the opportunity to step into the past – 15 years ago to be exact.

We take for granted the technological advances that have so seamlessly integrated into our daily lives. It’s easy to overlook their profound impact.

Mobile and digital payments – seeing the end to the cash economy.

Internet and now Artificial Intelligence – bringing our world closer and revolutionising the way we work.

Whilst these advances appear seamless and uneventful, we know that these technological advances are the result of persistent, and in some cases, difficult transformation.

So, 15 years ago… as anyone in this room who bought or sold a house at that time will tell you, it was an agonising process that had barely changed in a century.

Hours spent with solicitors, phone calls and faxes bouncing back and forth, and then, on settlement day, two sets of lawyers and at least one bank representative gathering in a room to exchange documents and bank cheques.

Then you had to lodge everything with the land titles office, and heaven help you if you were working across state lines, with a different system operating in every jurisdiction.

The process typically took weeks, and at every stage there was the chance of human error. Mistakes were not uncommon.

A full 20 years after the ASX first introduced electronic trading, the state and federal governments across Australia, nudged into action by the banks, finally realised something had to change in the critical property sector.

A sector that makes up 13 per cent of Australia’s GDP and directly employs more than one million people.

In 2008, electronic conveyancing was added to the Council of Australian Governments agenda of deregulation priorities.

The aim was the creation of a new national system to electronically lodge and settle property transactions.

From this, National E-Conveyancing Development Limited – now known as PEXA – was born.

The first PEXA transaction occurred here in Victoria in 2013 – a mortgage discharge.

The PEXA digital exchange was up and running and today, what once took weeks of frustration and too much time in lawyers’ offices, takes a matter of minutes in a safe and secure digital workspace.

In 10 short years, the PEXA Exchange has handled more than 16 million transactions worth more than $3 trillion. Our Exchange platform connects over 10,000 lawyers and conveyancers, 160 financial institutions, and 20 government agencies.

We settle nearly 90 per cent of all property transactions in this country, helping nearly 1 million people a year with the biggest transaction most of them will make during their lives.

In 2021 we listed on the Australian Stock Exchange, and today, PEXA employs over a thousand people in Australia and overseas.

We are on our way to building a truly global business.

Our growth strategy is built on two pillars:

• PEXA Digital Growth, which aims to nurture and enhance innovative technologies and data insight products across the property value chain which I’ll talk about shortly; and
• PEXA International, which aims to leverage the success of the PEXA Exchange in new overseas markets as they make the shift from paper-based conveyancing to digital settlements.

Going back to where we started, thanks to a COAG decision in 2008, Australia now leads the world when it comes to e-conveyancing.

Other countries are not so fortunate – and that’s where we see opportunity to create an impact.

The target of our first major overseas expansion is the United Kingdom, a market that is crying out for the services we can offer.

Research we undertook in March 2022 through a survey of 1,000 consumers revealed roughly 31 per cent of property transactions in the UK fell through before settlement. That can be for any number of reasons, from financing snafus to a change in family circumstances.

But we know that time is a large contributing factor, with British property buyers and sellers typically waiting between three and six months to complete a property transaction. Three to six months!

We also know that roughly 20 per cent of house movers are calling their moving company to cancel because of settlement delays – and 8 per cent of people cite mental health issues when undertaking a settlement process. That’s unsustainable.

While breaking into a highly regulated market like the UK hasn’t been without its challenges, we’re now part of a coalition of the willing – like-minded government, regulatory, industry and banking players – who can see the benefits of the seamless, secure digital property settlements Australia takes for granted.

To this day, Australia’s world-first digital property exchange remains a shining example of cross-government and industry collaboration.

PEXA transformed an entire industry and is a success story in this country.

We are proud to be associated with that innovation success story and our burgeoning purpose to connect people to place.

We connect people to place through the exchange of buyers and sellers of property, and ultimately, their homes. We connect policymakers and other stakeholders to critical data insights which I’ll talk further.

And talking to the theme of Melbourne as a liveable city and one which harnesses its place as a metropolitan tech hub, our connection to Victoria, and of course, Melbourne has remained strong.

The Victorian Government was an early, strong supporter of PEXA.

The COAG chair at the time of our formation was former Victorian Premier John Brumby AO, former local Senator Lindsay Tanner was COAG Business Regulation and Competition Working Group Lead, and we were proud to have Treasurer Tim Pallas open our PEXA offices at the Docklands in 2017.

Melbourne has been the perfect home for the incubation and growth of PEXA into one of the leading technology companies in the property sector.

According to the Victorian Government there are 8,000 technology companies in the State, including 2,700 start-ups. At PEXA, we share the Docklands end of Collins Street with technology giants and up and coming tech outfits – including Cognizant, IQ Group, iSelect, nbn, Optus and Servian, alongside the Passport Office, Transurban, AUSTRAC, and a host of consulting giants.

We work closely with some of the world’s leading research institutes, including the Grattan Institute, and have forged strong partnerships with Accenture, AWS, and Thoughtworks.

We also have access to a diverse, engaged, highly skilled, tech-literate workforce, with our Australian R&D work carried out in our Melbourne offices alongside colleagues in southeast Asia.

We have forged strong relationships with Victoria University and Melbourne Business School’s Centre for Business Analytics, where we host masters-level students to work on PEXA challenges.

In the past two years, we have invested in two Victorian-based businesses as we build out a multi-brand, multi-jurisdiction group of innovative digital services creating value across the wider property ecosystem.

• There is .id, or Informed Decisions, which has been providing demographic and economic forecasting data to more than 300 local councils for the past quarter of a century; 
• Land Insight, a leading environmental risk data business identifying environmental risks and potential contaminating land use practices; and
• Value Australia, which applies state-of-the-art analytics and artificial intelligence to deliver highly accurate data to help determine property valuations.

We are already bringing our expertise, experience, and considerable resources to help scale these innovative businesses and in-turn, support policy makers, financiers, and developers deliver more urgently needed housing stock, while ensuring they are planned out appropriately to match changing demographic profiles, and are climate change resilient.

.id’s data is enabling policy makers to make better decisions when it comes to housing and property development in their areas. The kind of micro-geographic level population data trends and analysis they can provide is the key to addressing issues like housing affordability and climate change.

Let me touch on the national crisis of housing affordability – something that is very close to our hearts given property ownership is the lifeblood of our business. 

At PEXA, we work directly with non-government organisations like Home for Homes and Housing All Australians to directly address the issue and get more Australians into homes.

But we also bring our knowledge and unique insights across the entire Australian property market to help devise and drive long-term solutions.

What our own research shows us is that those Australians who can break into the market – and there are fewer and fewer of them – are often forced to buy in the suburban fringes far from the centre of cities.

They are denied opportunities that may increase their quality of life, including access to services, community support, and higher paying jobs found in city centres and employment hubs.

They aren’t reaping the economic benefits that living in a city should bring them, benefits that generations of Australian city and suburb-dwellers have enjoyed.

We know from the population forecast data produced by .id (Informed Decisions) that over the next 25 years, Australia’s four largest states, Victoria, New South Wales, Queensland and Western Australia will receive 93% of the forecast population growth, with two-thirds of the total population growth expected to be in the Greater Capital Cities of Melbourne, Sydney, Brisbane and Perth.

Melbourne alone, will receive 23% of the national population growth.

We also know that here in Victoria, the Government aims to build 800,000 new homes over the next ten years.

However, forecasts from id also indicate that only 488,000 new dwellings will be built in that time, suggesting that we are not building enough dwellings to meet future needs and this will impact the Government’s success in addressing housing affordability.

The Australian residential rental market, home to more than 1 in 5 Australian households, is not working for anyone either.

Renters face acute affordability challenges, while our research shows that most private landlords would be better off putting their money into superannuation.

These crises fundamentally threaten the Australian way of life, and underpin some of our toughest societal challenges, from homelessness, to health and wellbeing, and employment and economic growth.

Put most simply, the current system is broken and is failing Australians.

Countless well-meaning solutions have failed. Government support measures such as homebuyer grants are either ineffectual or contribute to the problem by boosting demand without a corresponding increase in supply.

At PEXA, we believe there needs to be improved planning, and more options to tap private capital through measures such as shared equity schemes and institutional ownership of rental properties.

This was the finding of a landmark whitepaper series we were proud to be a part of with Melbourne-based property advisory firm, Longview.

I am confident that with concerted effort between government, industry, NGOs, and the wider community, we can make tangible inroads in this crisis. It demands nothing less.

On that, I want to thank the Committee for Melbourne, and Mark, for the invitation to be with you today and provide insight into the transformation of the conveyancing industry, as well as the transformation of PEXA – a proudly Melbourne story that is now spreading its wings across oceans.

Thank you.