Not-for-profit fund First State Super and private sector operators Hastings Funds Management and Royal Bank of Scotland’s pension fund have won an agreement to lease the NSW government’s 150-year-old land titles registry after lodging a surprisingly large bid of $2.6 billion.
Premier Gladys Berejiklian described the deal as “a win-win for all concerned” and said the integrity of the title system would not only be maintained, but enhanced.
But the Real Estate Institute of NSW (REINSW) said it was “disappointed” that the registry had been sold off.
Ms Berejiklian said that she was “extremely confident” the sale wouldn’t lead to an increase in property costs, Fairfax reported.
Critics warned against the long-planned move to privatise the agency, saying it could lead to higher prices in an overheated property market.
But Ms Berejiklian has dismissed those concerns.
“This process has allowed us to cap increases in accessing documents by CPI (the Consumer Price Index),” the Premier said.
“Previously, governments could willy-nilly increase the cost of accessing documents or discharging mortgages.”
The Premier also assured the public that if the new owners do not fulfil their obligations, the Government could intervene.
“The step-in provisions relate to a lack of adequate service, concerns over managing the business itself,” Ms Berejiklian said.
“Ironically this process has allowed us to strengthen the ability of the Registrar-General to keep an eye on what actually goes on.”
The Government will invest $1 billion of the proceeds into upgrading three Sydney stadiums — Parramatta, Homebush and Moore Park.
The remaining $1.6 billion will be spent on other infrastructure, with the Premier pledging 30 per cent of that towards unspecified projects in regional NSW.
Registry staff will have their jobs protected for four years, under a guarantee signed by the new operators.
Opposition Leader Luke Foley said he doesn’t believe the Government’s promises that privatisation will lead to better outcomes for customers.
“In the last year they put fees up for many transactions often to the tune of several hundred per cent,” he said.
“Now they say ‘oh the new owner will be barred from putting up fees above CPI’ – the Government’s done all the dirty work for them.
“They put all the prices up sky-high over the last 12 months to fatten the pig for market day.”
The Labor Opposition said the deal was a poor one for the state as the registry made a $130 million profit in 2015-16.
“They’ve sold it off for 20 years worth of the current profit … and we know the profit is going to keep going up,” Mr Foley said.
The Hastings-First State consortium has received approval from Commonwealth regulators including the Australian Taxation Office, the Australian Competition and Consumer Commission and the Foreign Investment Review Board.
Security of title will remain unchanged as the government will continue to guarantee title and operate the Torrens Assurance Fund, which compensates landowners who suffer a loss due to fraud or error on the register.
First State is a $59 billion fund which developed from a NSW public sector fund and Hastings is owned by Westpac.