PEXA Draft IPART outcome 20% down; d/g to Neutral

Research evidence excerpt

PEXA Draft IPART outcome 20% down; d/g to Neutral

of 6.5% EV/EBITDA - 27E 15.8 16.3 0.5x

post-tax on real terms, which corresponds to a nominal WACC of 9.3% post-

Half Yearly Forecasts (FYE Jun) tax. JPM Comment: Slightly lower than our assessment of 9.75%. Together,

Adj. EPS (A$)

this results in an outcome of a 20% revenue reduction. 2025A 2026E 2027E

• How are the changes applied - reductions only to transfers: The 20% H1 0.06 0.13A 0.05 H2 (0.01) 0.01 0.05

revenue reduction is applied via cuts to the 4 transfer fees only, with FY 0.05 0.14 0.10

remortgages, caveats, discharges and refinances frozen in real terms (CPI-

indexed). This corresponds to a ~16% reduction in transfer of interest, 36.6% Style Exposure

reduction in transfer of titles, 14.6% reduction in transfer of interest in multiple

titles and 33.1% reduction in transfer of titles for multiple titles. All other prices

are unchanged and are to increase with CPI - including for remortgages. There

is DVAM that adjusts revenues retroactively for any differences in transaction

volumes relative to forecast to ensure PEXA are not penalized twice in the

current uncertain transaction volume environment.

• Timing and next steps of recommendations: The current pricing structure

will remain in place for FY27. The new pricing regime will apply from FY28

and onwards. In FY28, transfer prices will step down to make purchasing

a home ~$50 more affordable for the average home buyer. The transfer

price will then step back up by CPI each year from then. These prices will

remain in force for a regulated period of 4 years from FY28 before being

reviewed once again in 2031.

• Remainder of consultation period - recommendations are draft: We would

reiterate that this is a draft report out for consultation. There will be a public