Australia’s real estate sector is the industry of choice for money laundering and more professionals should be required to report suspicious transactions, according to an anti-corruption group.
Transparency International Australia says an influx of dirty money into the country could drive house prices even higher, but the property industry disputes that claim.
The federal government is consulting to include accountants, lawyers and real estate agents in legislation requiring certain professions to report suspicious transactions to authorities.
The anti-corruption group supports this initiative because the existing laws focus on other areas, including casinos and the financial sector.
An anti-corruption group fears the Australian property market is being infiltrated with dirty money and driving up house prices even further (stock image)
Transparency International Australia chief executive Clancy Moore said Australia’s existing anti-money laundering rules were among the weakest in the world.
“Australia’s property sector is now the preferred destination for criminals to place their illicit money,” Moore said.
“Several high-profile cases, media reports and AFP arrests have demonstrated how kleptocrats, scammers and corrupt officials from countries like China, Cambodia and PNG are using the Australian property market to launder their dirty money and hide their crimes.”
These comments come ahead of the National Integrity Summit to be held this week in Melbourne which will explore issues of integrity, corruption and governance.
The president of the Real Estate Institute of Australia, Hayden Groves, hit back, saying the main factor behind house prices and rents was a severe housing shortage.
“Australian Federal Police and the Australian Government cannot currently demonstrate any evidence-based link between money laundering and Australian property values, or the scale of money launderers’ operations, despite numerous requests from our industry to better understand that,” Mr. Groves said.
He said the industry group was committed to playing its part in the fight against the capture of money launderers and was working with the government on the proper reporting of suspicious individuals.
Transparency International Australia says more professionals should be required to report suspicious transactions (stock image)
Real Estate Institute of Australia president Hayden Groves hit back, saying the main factor behind house prices and rents was a severe housing shortage (stock image)
Property prices have risen in Sydney for the sixth consecutive month despite rising interest rates due to record immigration, making it difficult for first-time homebuyers to enter the property market.
In the market for Australia’s most expensive capital, the median rose another 1 percent to an even more unaffordable high of $1,333,985 in July, according to data from CoreLogic.
Property prices in Sydney have risen every month since February, even though the Reserve Bank has since May 2022 hiked rates 12 times to an 11-year high of 4.1%.
In other major capitals, house prices started to rise again in March.
House prices in Melbourne have risen for five consecutive months, rising another 0.3 per cent in July to $923,881.
In Brisbane, property prices rose another 1.4 percent last month, to $819,832.
Perth values rose 1 per cent to $625,969.
The recovery in Adelaide began in April, but monthly increases since then have been larger, with prices in July rising another 1.4 per cent to $722,793.
Prices in Darwin rose for the third straight month in July, rising 0.5 percent to $583,913.
But prices fell in smaller capitals that don’t see large numbers of new migrants, with prices in Hobart in July falling 0.1 percent to $696,570, while prices in Canberra fell 0 .3 percent to $958,950.
Property prices are rising as higher interest rates lead to fewer building permits, making real estate even scarcer in major cities at a time of rapid population growth.