An online public hearing by the Independent Pricing and Regulatory Tribunal on July 21, held over Microsoft Teams, became the stage for an intense confrontation over PEXA’s future profits.
The regulator’s interim decision forces the ASX-listed property settlement platform to slash its service fees by about 20%. That price cut translates into an expected halving of profits for Property Exchange Australia, a business that dominates electronic property settlements nationwide.
Management and major shareholders used the hearing to argue the finding is excessively severe and should be rolled back.
IPART’s stance leaves PEXA in a tight corner, because its near-monopoly grip on electronic lodgment networks now looks more like a liability than a competitive advantage.
The tribunal is unconvinced by pleas for softer treatment, signalling that any final decision is unlikely to diverge far from the provisional ruling.
Investors, including large industry superannuation funds and Commonwealth Bank, now confront a sharp downgrade to the company’s earnings profile.
Many are asking how they underestimated the regulatory risk baked into a business that regulators can effectively reprice overnight.
