ANZ Bank’s head of financial crime, Guy Boyd, has condemned what he sees as the failure of successive governments to deal with money laundering in Australian real estate.
“There’s been probably a lack of political will and that’s probably been driven by some very vocal opposition from those industry sectors,” Boyd told ABC’s The Business in an interview.
Boyd added that the lack of regulation in Australia makes it an appealing target for money launderers.
“I think Australian real estate is obviously an attractive destination for capital, both legitimate and illegitimate,” he said.“I wouldn’t know if it I would call it a haven but certainly it is a place of choice for illegitimate money.”
In recent years, Australia’s red-hot property market has attracted criminals who have laundered billions of dollars through property.
In 2006, the government enacted a new anti-money laundering law with promises to widen the legislation to cover real estate agents, lawyers and accountants. But that widening never happened.
Although Australia’s housing market has been targeted by money launderers from countries including Indonesia, Papa New Guinea, and Malaysia, the main culprit is thought to be China.
In January, the Australian Transaction Reports (AUSTRAC) revealed that a total of 5886 transactions by Chinese investors were deemed suspicious in 2015-2016.
The total value of the dodgy transactions was $3.36 billion, $1 billion of which was related to real estate property according to AUSTRAC.
Both Australia and China have imposed new regulations that make purchasing property in Australia tougher for Chinese investors.
But that hasn’t stopped the investors from coming up with ways to get their money out of China. One workaround involves using friends and family members to make multiple cash transfers to Australia. Another involves using companies set up to make purchases through.
It is speculated that wealthy Chinese are keen to get their money out of China before the renminbi devalues, something that many think will happen within the next few years.
While he isn’t against further regulation, Real Estate Institute of Australia (REIA) President Malcolm Gunning is a little worried about the burden it will place on agents.
“The Real Estate Institutes are not opposed to it, but the concern is the responsibility that goes with it and the education that is required to be able to enact that,” he told The Business. “Real estate agents aren’t lawyers, they don’t study the law in depth, so if we are to be gatekeepers as with the conveyancers and say, necessarily the accountants and the advisers, then we need to be better educated.”