ISCOVER
The future of competition in e-conveyancing is being thrown into further doubt, as PEXA reveals it is seeking to recover $14 million in interoperability costs.
In an announcement to the ASX on Monday (11 August), PEXA Group Limited (PEXA) revealed it had taken a non-cash impairment charge in its second-half FY25 results relating to the Interoperability Program, casting further doubt on the future of competition in e-conveyancing.
In the ASX announcement, the digital property exchange and data insights business noted that the pause has left the asset “idle for 12 months”, with parts of the software now outdated.
With "uncertainty" persisting over the program’s next steps, the company concluded the asset no longer met accounting criteria to remain on its balance sheet.
“PEXA will seek to recover interoperability costs and continue to engage constructively with regulators on the Program,” the group stated, estimating its software costs had been around $14 million.
While it said that it would “continue to engage constructively with regulators on the program”, it added that any restart would require “additional investment and product development”.
Interoperability’s troubled road
The national interoperability regime was intended to open up competition in Australia’s e-conveyancing market by allowing different electronic lodgement network operators (ELNOs) to transact seamlessly with each other.
PEXA was the original player in e-conveyancing and holds a monopoly. It processes around $1 trillion in property transactions a year and completed its national network after launching in the Northern Territory last week.
Under the model, practitioners could subscribe to the ELNO of their choice (for example, by using Sympli and LEXTECH) and still complete transactions with parties using other platforms. The framework was scheduled to be ready by 31 December 2025.
However, the initiative has faced repeated setbacks and the whole regime was paused in June 2024 by the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) following ongoing issues.
This was compounded in May ,when LEXTECH — one of the two challengers to PEXA — withdrew from the scheme, citing a lack of economic viability for more ELNOs.
Sympli CEO calls on government to 'step up and make the right decision'
That decision left Sympli as the only remaining competitor working towards interoperability.
Sympli, jointly owned by ASX Limited and InfoTrack, has been pushing for a “practitioner-first” release of the regime as an interim step, allowing lawyers and conveyancers to choose their platform while lenders could remain with their current provider.
It argues this approach would bring “much-needed choice” for small businesses sooner, even if it would not immediately deliver full market resilience.
In comments to The Adviser following PEXA's latest move, the CEO of Sympli, Philip Joyce, said: "PEXA's announcement this morning reiterates how critical it is for ARNECC and Government to make a positive decision this year on next steps to implement competition in this market".
"This is a clear sign that the PEXA monopoly has taken Government's indecision as a greenlight to chop their investment and limit choice for the industry".
The Sympli CEO continued: "We are calling on Government ministers and ARNECC to step up and make the right decision this year, otherwise risk an emboldened monopoly in this market, forever.
"That would perpetuate a massive single point of failure risk and block meaningful benefits for consumers and small businesses".
The push comes against the backdrop of recent technical issues at PEXA, including a May outage that delayed a portion of settlements in NSW and Victoria. Industry groups, including the Australian Institute of Conveyancers, have warned that the current lack of alternatives puts the system at risk if disruptions occur.
The NSW government is also currently conducting an inquiry into competition in e-conveyancing, looking into the development of a competitive market and addressing potential monopolies, particularly concerning PEXA.
The inquiry is being led by the select committee on competition reforms in electronic conveyancing, which was established by the NSW Parliament.
Other PEXA write-downs
The interoperability update from PEXA forms part of a broader write-down of assets in PEXA’s Digital Solutions segment.
The move follows a broader strategic review of the business under new CEO and managing director Russell Cohen, who joined the company in March.
Cohen said his initial assessment of the group had prompted a more targeted capital allocation strategy, resulting in a "realignment" of investments. This now includes "a more targeted approach and no longer investing in non-core digital products or investments".
These impairments have pushed the group’s non-cash impairment charges and "other minor movements" from $35m–$40m to $66m–$70m for FY25.
While the PEXA CO and MD said the impairment decisions were “not taken lightly”, Cohen said they formed part of a deliberate effort to “strengthen the business for future profitable growth” and “allocate capital where we see the best opportunity for outstanding shareholder returns”.
“It became apparent that we would benefit from a deeper dive into the Digital Solutions business to ensure we are focusing on our core strengths,” Cohen said in the ASX update.
PEXA will release its full-year FY25 results, and further detail on the strategic review, on 29 August 2025.
[Related: PEXA enters NT as transactions top $1tn]
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