How Australia avoided a conveyancer capacity crunch during Covid-19

Despite early fears that the coronavirus pandemic would lead to a downturn in activity, the Australian housing market – much like the UK’s – experienced something of a boom.  

A combination of Government incentives and resurgent buyer demand led to Australia seeing consistently high levels of activity. Our latest data showing transactions running 34 per cent higher year on year. [1] This is a significant uplift given the initial concerns that the market could be headed towards a trough.

What is notable about the rocketing demand seen in Australia, though, is that it didn’t result in the same operational challenges seen in the UK. Here, the increased pressure placed on lenders, advisers and conveyancers resulted in delays and as demand peaked in the lead up to the Stamp Duty holiday deadline, average transaction times from point of sale to completion increased. At its worst, the slowdown drove timelines from an average of 12 weeks to around 18, in September 2020.[2] Players Down Under fared altogether better.

This is an interesting comparison because traditionally there have been clear operational similarities between the two markets. They both, for example, relied on manual processes which created fragmented and protracted completion journeys. This reliance was perhaps even more prominent in Australia as the UK market had already partly begun investing in technological innovations.

The benefits of digital

More recently, however, things have changed. Australia has become the first country in the world to implement a fully digitalised property settlement process and buyers and sellers today benefit from a simple, online exchange platform. This has helped reduce costs for customers, minimised errors and delays, and made it easier to quickly check the status of a transaction.

While crucially improving customer outcomes, and allowing conveyancers and lawyers to reduce their administrative burden, it has also shown how technology can help improve market resilience. By optimising the settlement process, friction has been minimised, allowing the conveyancing system to handle both a surge in new transactions, and the challenge of remote working.

In real terms, this digital approach has also meant that processes which would previously have taken weeks now happen far faster. The remortgaging process is a great example. In Australia, it can take just a day for those who desire a quick turnaround. Faster remortgaging saves borrowers money, and it puts vast amounts of time back into the hands of conveyancers, allowing them to focus on providing expert legal advice rather than administration.

While many would argue that enhancements to the conveyancing and post-offer process in the UK have been long overdue, the coronavirus crisis has shed a bright light on the issue. In Australia, we saw the benefits of an all-of-industry collaboration – with support from lenders, the legal sector and government – to transform the sector. The same benefits are in reach in the UK. As we build and refine our platforms and products – with industry input – in the UK, we are determined to help deliver a more secure, seamless and streamlined digital process, harnessing technological innovation to help conveyancers embrace a more sustainable way of working post-Covid.

James Bawa is CEO of Property Exchange Australia (PEXA) UK

[1] https://www.pexa.com.au/images/uploads/page_parts/Pdfs/Insights_PMI/PEXA_Insights_PMI_Report_Sep_21.pdf

[2] https://www.thetimes.co.uk/article/property-exchanges-taking-a-month-longer-due-to-buying-process-backlog-vr6flxbch

 

 

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