Reported by Christopher Knaus and Nick Evershed

Convicted criminals and unlicensed agents are operating in the real estate sector across multiple states, a Guardian Australia investigation has found.

In New South Wales, the Guardian has established that two individuals convicted of dishonesty offences have been allowed back into the industry well within the usual 10-year prohibition, and that gaps in the law mean convicted money launderers are able to find their way back into the industry.

In NSW, Victoria, Western Australia and Queensland, authorities have together fielded hundreds of complaints about real estate agents operating unlicensed and a Guardian analysis of property ads suggests dozens are selling or leasing property without being listed on Victoria’s public register.

The revelations come as the federal government pushes to subject the real estate sector to additional scrutiny through its second tranche of counter-terrorism financing and money-laundering laws. The legislation, introduced to parliament last week, is designed to force the real estate sector to take steps to prevent money laundering and bring Australia in line with other developed nations.

Why real estate attracts criminals

Australian federal police say the Australian property market, given its value growth and liquidity, has become an “attractive destination for criminals to both store value and enjoy the fruits of their illicit activities”.

The AFP told the Guardian criminal groups were using real estate agents to give crime proceeds an “appearance of legitimacy” through asset purchases.

AFP data shows real estate is by far the biggest asset type seized by its criminal assets confiscation taskforce. The AFP restrained about 78 properties worth $106.6m in 2021-22, with an average property value of $1.36m. That doubled the following year, when $220.4m in property was restrained, with an average estimated value of $2.34m a property.

“The real property market can be exploited by money launderers in a number of ways, including utilising complex ownership structures to obfuscate true ownership, concealing illicit money flows as rental income, and investing illicit cash into property improvement activities,” an AFP spokesperson said.

“Criminal groups may use professional facilitators – such as real estate agents, accountants and solicitors – to give illegal cash the appearance of legitimacy through the purchase of assets, such as property.”

Real estate agents are regulated using licensing systems that differ across jurisdictions. In NSW anyone convicted of a dishonesty offence – or facing court proceedings for dishonesty offences – is deemed a disqualified person for 10 years, unless it is deemed trivial.

Read full report: https://amp.theguardian.com/australia-news/2024/sep/17/australia-real-estate-industry-licences-money-laundering-laws