Australia's peak real estate body has denied claims the booming property market is being targeted by organised crime to launder tainted cash.
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Providing evidence to a senate inquiry in the effectiveness of Australia's anti-money laundering and counter-terrorism financing laws, Real Estate Institute of Australia claimed there is no evidence criminals are targeting property, despite a swath of government and law enforcement agencies flagging it is a prime target.
The committee heard evidence criminals using tainted cash to buy property could potentially manipulate house prices and legitmise laundered funds through the acquisition of an asset.
Australia is one of three countries which has not broadened its AML/CTF laws to encompass non-financial companies and gatekeeper professions such as accountants, lawyers and real estate agents.
Labor senator Deb O'Neill said broadening the laws in line with the global standards set by the Financial Action Task Force, would ensure sectors like the property market could not be thwarted by criminals.
"Australians are very interested in what happens in real estate," Senator O'Neill said.
"But they also want to know that there is a level playing field and they are not being squeezed out of a home or purchasing land, or fulfilling their dreams of home ownership by people who have got money illegally and are laundering money through the Australian real estate industry."
REIA president Adrian Kelly responded: "I have not seen any evidence or data to suggest that..."
Australian Federal Police confirmed in the last financial year, $116 million of the $187 million seized assets related to real estate.
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Senator O'Neill also slammed REIA for watering down its stance on not backing the expansion, which in its submission said is "problematic and overly burdensome".
Witnesses on Tuesday told the committee the delay in adopting tranche two of the AML/CTF act was making Australia an attractive destination for organised crime.
A number of groups also claimed the federal government has not engaged with stakeholders since at least 2016 on potentially expanding the legislation.
The Law Council of Australia said there is little evidence of lawyers being corrupted by criminals in relation to money laundering. Agencies gave contradicting evidence.
The Australian Criminal Intelligence Commission said it supports the expansion, claiming professions such as lawyers and accountants were a risk of being corrupted by organised crime.
ACIC manager Robert Jackson said it is very hard to define if money launderers are manipulating house prices, but flagged the agency is aware the property sector is being targeted.
AFP said the vulnerability of the property market is a significant risk, as higher house prices could allow more funds to be laundered.
In the last financial year, AFP has charged 17 people over property transactions linked to money generated from the proceeds of crime.
AUSTRAC noted the assumption of rising house prices as a result from money laundering was a potential scenario it highlighted while suspicious matter reporting is not applicable to the property sector.
The financial crimes watchdog said the majority of suspicious matter reports come from the major four banks, which would include transactions for property purchases.
Prime Minister Scott Morrison has recently announced Australia would adopt the tranche two standards of FATF.
