Does PEXA have plans to go global? Marcus Price, CEO of PEXA says that his organisation is in active conversations with a number of countries.
PEXA’s sale or IPO was expected to benefit from an effective monopoly position. Then, in February 2018 to the surprise of many, InfoTrack confirmed that it intended partnering with ASX to provide an electronic property settlement platform. Subject to regulatory approval from ARNECC, the platform is expected to be operational this year.
Formidable competition to PEXA now hangs over its sale. Overseas expansion may alleviate such a setback.
The PEXA platform began to be built in 2011. Since day-one it has been drawing in investment funds and has yet to report an annual profit. Last year (2016/17) it made a loss of $79.3m.
Slow adoption by users has contributed to its financial performance to date. This has been rectified in part due to legislation being adopted around the country to mandate the use of electronic settlements. Profitability has to be a sure thing under mandating legislation and an effective monopoly position.
PEXA has been a disruptor of manual processes. However, developments in technology stand still for no one. In 2011, when the platform began to be built, how many of us had heard of blockchain? Today, it is blockchain that is being investigated as the new technology to support real estate transactions.
In October 2017, the Government of Dubai announced that Dubai Land Department (DLD) became the the world’s first government entity to adopt Blockchain technology.
“DLD has created the Blockchain system using a smart and secure database that records all real estate contracts, including lease registrations, and links them with the Dubai Electricity & Water Authority (DEWA), the telecommunications system, and various property related bills. Blockchain’s secure, electronic real estate platform incorporates personal tenant databases, including Emirates Identity Cards and the validity of residency visas, and allows tenants to make payments electronically without the need to write cheques or print any papers. The entire process can be completed electronically within a few minutes at any time and from anywhere in the world, removing the need to visit any government entity.”
Other countries are at different stages of exploring and implementing blockchain including UK, Russia and Sweden.
Will a blockchain land registry make any difference to how electronic conveyancing is conducted? Will blockchain simply be a technology in the background that conveyancers will not need to know about? Does blockchain have the potential to disrupt an electronic conveyancing platform such as PEXA?
According to finance academic, Danika Wright:
“… blockchain, could transform the way we buy and sell real estate by doing away with the hidden costs and inefficiencies of our housing markets.
“Blockchain is an online ledger that records transactions. It’s capable of recording the movement of any kind of asset from one owner to the next.
“It’s public and isn’t owned by any one corporation, there are no charges to record transactions. Its openness ensures the integrity of transactions and ownership, as everyone involved has a stake in keeping it honest.
“This means there are fewer intermediaries; less middle-men who increase the costs and time to complete a transaction.”
In a future world of blockchain, which middle-men will still be essential and which will not?
© 2018 Legal Practice Intelligence