Risk insights and indicators of suspicious activity for the real estate sector

Discover our latest risk insights and what suspicious activity indicators to look for if you work in the real estate sector.

On this page

• Background
• Who may exploit your services
• Providing designated services
• Main risks and their indicators
• Kinds of customers
• Kinds of services
• Delivery channel risk
• Foreign jurisdiction risk
• Other risk factors
• Related pages

From 1 July 2026, anti-money laundering and counter-terrorism financing (AML/CTF) obligations apply to the real estate sector. 

As part of these obligations, you need to conduct a money laundering and terrorism financing (ML/TF) risk assessment and know what suspicious activity to look for with your customers. The following suspicious activity indicators will help you to identify potential ML/TF as well as other serious criminal activities. 

This page provides an overview and does not cover every risk, or every service, relevant to the real estate sector. 

You must consider information we’ve communicated to you that’s relevant to your money laundering, terrorism financing and proliferation financing risks.

This information will help you to:

• understand money laundering risks in your sector
• inform your ML/TF risk assessments
• strengthen your AML/CTF policies
• identify suspicious activity. 

Background

Our money laundering national risk assessment found the real estate sector poses a high money laundering risk in Australia. 

While our risk assessments on terrorism financing and proliferation financing identified no specific risks for the real estate sector, your awareness of these risk environments is essential. 

This page focuses on the money laundering risks for the real estate sector.

Who may exploit your services

Real estate is one of the most common property types found by law enforcement in relation to proceeds of crime investigations. This shows its popularity as an asset and the ease with which illicit funds can be laundered or invested in this sector.

Property can be negatively geared, generate income and deliver strong investment returns for investors and criminals alike. Criminal networks can buy real estate to use as ‘supply houses’ – where they grow, make or distribute illegal drugs. 

Real estate professionals are often the first contact point for criminals trying to launder money. 

Providing designated services

Real estate professionals and conveyancers are individuals or businesses who provide designated services to their customers. 

Learn more about the designated services real estate professionals provide.

Main risks and their indicators

The 4 areas of money laundering risks and suspicious indicators are: 

• Kinds of customers
• Kinds of services
• Delivery channel risk
• Foreign jurisdiction risk

Kinds of customers

Australia has an attractive residential and commercial property sector. Customers range from professional investors to people you may have a short-term relationship with. 

Your professional services are an easy target for illicit activities. You should consider a range of factors when assessing customer risk when working with: 

• customers with cash-intensive businesses. This presents an opportunity to mix illicit physical cash with legal earnings
• people who buy or sell for others. This can hide the buyer’s identity
• customers connected to industries associated with higher ML/TF risks, including but not limited to those listed in Australia’s national risk assessments
• remote buyers who haven’t personally inspected the property
• politically exposed persons (PEP), because of exposure to fraud, bribery, corruption and links to high-risk jurisdictions. You must always treat foreign PEPs as high-risk customers
• customers where their business structure makes it difficult to identify the true beneficial owners. 

You should also find out if your customers are themselves in sectors we regulate under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (the Act). This may help to limit any risks linked to them.

Foreign buyers

Working with non-resident buyers can expose you to higher risk, because: 

• there may be few or no face-to-face transactions
• your customers may be from countries with high criminality and poor regulation. 

Money laundering linked to corruption is a major concern. Australian real estate is an attractive investment for PEPs.                                                                                                                           

Companies, trusts and other legal entities

Complex legal structures often include: 

• multiple layers of related companies
• trusts that have intricate structures.

These structures offer benefits like limited liability and flexibility but come with increased complexity and legal obligations. Additionally, details about the beneficial ownership of a trust are rarely publicly available and can only be identified by obtaining the trust’s deed.

Legal structures are attractive to criminals because:

• they make it difficult to identify the true beneficial owners
• companies have larger and more frequent transactions, providing opportunities to hide suspicious transactions among legitimate transfers
• complex structures or entities with connections to foreign jurisdictions – including those with weak AML/CTF laws – make it difficult for authorities to track beneficial owners or suspicious transactions
• criminal groups can force, or pay, people on temporary visas to set up companies in Australia. These companies are then used to launder money
• it can be harder for authorities to confiscate assets and crime proceeds from criminals when they are held in a company name. Criminals will conceal ownership and control through layers of companies to distance themselves from illicit activities
• criminals may appoint a family member, associate, or professional as a nominee director or shareholder. They’ll hide ownership and control of a company, helping distance themselves from illicit activities
• criminals can use stolen identities to start a company they’ll launder money through.

The purchase of high-value residential and commercial properties often requires multiple financing sources. Criminals could be using the proceeds of crime as one of those financing sources.

For non-financed purchases, the risk can be more significant. Criminals can avoid customer due diligence (CDD) obligations and the regulated loan market if they can self-finance. 

Indicators of suspicious customers

Red flag indicators of suspicious financial activity are valuable tools for detecting illicit behaviour linked to ML/TF and other crimes. Below are red flags you should be aware of.

On their own, one of these indicators may not suggest suspicious activity. If you’re unsure whether there are reasonable grounds for a suspicion, you should conduct further monitoring and examination, including applying enhanced customer due diligence measures.

Customer behaviour indicators

It could be a red flag if your customer:

• avoids face-to-face meetings
• is obstructive or secretive in their dealings with you
• has an unusual level of knowledge of AML/CTF requirements
• ends the relationship after you ask for more information
• appears to be following instructions of third parties
• seems to know both sides of a sale transaction
• buys a property in the name of a third party, relative or a minor with no legal or economic reason
• offers to pay more for services, such as higher commissions or brokerage fees
• asks for shortcuts and rapid transactions to quickly close the deal
• tries to avoid know your customer (KYC) processes
• is reluctant to prove their identity or provides vague information during KYC processes
• has documents in an unexpected format or seem forged or altered
• asks for a sudden change of ownership without a legitimate reason, especially close to settlement.

Customer profile indicators

The customer profile could raise red flags when they: 

• have a lifestyle or transactions inconsistent with what you know about their business and personal information
• use large amounts of cash for the purchase and cannot explain its source
• have been subject to negative media reports or other adverse information from a reliable source, connecting them to profit-generating criminal activity
• use a corporate or legal entity with a complex structure or financing, such as a shell company or trust, especially when purchasing a residential property
• have a business with little or no trading
• buy a property inconsistent with their business profile. For example, they operate a charitable trust and buy a luxury property
• are a politically-exposed person (PEP) or are closely linked to one. You must always treat foreign PEPs as high-risk customers
• are on Australian or United Nations Security Council targeted financial sanctions lists or are close associates of entities on these lists   
• have links to industries with ML/TF risks, including those identified in Australia’s national risk assessments.

Another red flag is if the customer is from, or is present in, a high-risk country due to associations with: 

• money laundering, including organised crime
• terrorist acts or terrorism financing, including providing money or support for terrorist activities
• proliferation of weapons of mass destruction
• corruption
• serious fraud.

Kinds of services

It can be difficult to distinguish everyday real estate transactions from money laundering. You may be involved in unlawful transactions without knowing it. 

Indicators of suspicious transactions and activity 

These red flag indicators may help you to identify suspicious aspects of property transactions.

Source of funds or wealth

It could be a red flag if your customer:

• seems nervous or reluctant to undergo customer due diligence
• can’t explain their source of funds or wealth, or provides false, misleading or wrong information
• uses complex loans or deposits from unusual sources
• uses third party transfers, private lenders, offshore banks or virtual assets
• uses promissory notes, bills of exchange, titles of credit or exchange titles. They may also use securities or another negotiable instrument that can be paid for in cash
• makes a full or partial payment of the property purchase price in cash to the real estate agent
• renovates and quickly sells a property with no obvious funding source.

Unusual transactions and requests

It could be a red flag if your customer: 

• provides you with instructions, in relation to a property purchase or sale, that are unusual or have no obvious financial purpose
• changes instructions multiple times or in a short period of time without good reason
• asks to hold a deposit in trust for longer than needed, then asks for changes to the funds distribution
• is quickly buying or selling properties for no clear reason
• offers to pays more than market value for a property
• is happy to accept less than the market value for a property
• directs sale proceeds to an unrelated third party
• conducts back-to-back property transactions, with rapidly increasing values or purchase prices
• uses indirect or direct property title transfers where no money changes hands when transferring equitable interest in properties
• pays for services by a method not in line with their profile
• offers to pay higher fees for services.

It could be a red flag if the customer has suspicious cash activity, such as:

• depositing cash directly into the agent’s trust to buy a property but pulls out from the transaction and requests a refund by cheque or funds transfer
• paying the deposit in cash or making a large one-off cash payment
• paying in foreign currency at settlement without a legitimate reason. For example, they may have no personal or professional links to the country.

It could be a red flag if the customer’s transactions are:

• unreasonably urgent or they request last minute changes
• outside your normal business or expertise. For example, agricultural property instead of residential
• unnecessarily complex resulting in higher customer taxes or fees
• paid by a third party.

Requests for complex arrangements

It could be a red flag if:

• third parties are responsible for all transactions, costs and/or repayments associated with a property without a clear reason for being involved
• your customer asks for the property title to be transferred to a complex corporate structure instead of the individual buyer themselves.

Delivery channel risk

Delivery channel risk is how you onboard and provide services to customers. The risks are higher when you act remotely or through intermediaries.

Your work often involves meeting your customer in person, which helps to identify red flags. You can also transfer your obligation to sell a property to another agent, where you both receive proceeds from the sale. Criminals might exploit this arrangement to hide the funding source or to bypass customer due diligence. 

Using third parties such as accountants, lawyers, and buyer's agents can also hide the true identity of the buyer. 

Delivery channel suspicious indicators 

Red-flag indicators can help you to identify suspicious circumstances relevant to customer interactions. These could include, if the customer:

• wants to complete processes online, or insists in online verification when they would usually be done in person
• gives limited contact options. For example, through messaging apps, phone or email
• uses third parties to distance themselves from the transaction or to hide beneficial ownership
• uses a different name on the contract to who you’ve been dealing with
• is buying a property they haven’t inspected.

Foreign jurisdiction risk

You may deal with customers, transactions and activities with links to foreign jurisdictions. You may also have international offices referring buyers or selling properties ‘off the plan’. 

Exposure to foreign jurisdictions creates ML/TF risks. It provides opportunities: 

• for illicit funds to move overseas that are the proceeds of crime committed in Australia
• to fund terrorist activity or proliferation of weapons of mass destruction
• for the proceeds of foreign money laundering to be brought into Australia. 

International transactions can also: 

• add complexity
• hide beneficial ownership and the true customer’s identity
• increase the risk of tax evasion
• make it harder for authorities to investigate or prosecute alleged criminal activity.

Factors that increase ML/TF risks include links to a country:

• with weak governance or AML/CTF regulations, or tax havens or secrecy jurisdiction
• with high rates of corruption, tax evasion or other serious crime
• subject to Australian sanction laws or similar restrictive measures. This includes countries believed to be high-risk or non-cooperative by the Financial Action Task Force (FATF)
• financing or supporting terrorist acts, or associated with a terrorist organisation
• engaged in proliferation of weapons of mass destruction, or a country used for diverting funds for proliferation financing
• in a conflict zone
• known for people trafficking. 

Foreign jurisdiction suspicious indicators  

Red-flag indicators for customers with international connections could include when the customer:

• uses offshore legal structures to enable the property transaction without a clear reason for doing so and/or these offshore legal structures are domiciled in a high-risk jurisdiction
• is a foreign resident for tax purposes or is based in a high-risk jurisdiction
• lives in, or has a company, registered in a tax haven or secrecy jurisdiction
• uses money from or sent to a tax haven, or a secrecy or high-risk jurisdiction
• sends money to or receives money from a sanctioned country.

Other risk factors

There are also risks for commercial real estate and property developers.

Commercial real estate

Commercial real estate, including business or retail spaces and industrial sites, can be vulnerable to money laundering because of:

• corporate customers who often use complex legal entity structures and financing to purchase property
• high value commercial purchases which may require multiple types of finance, helping to hide funding sources.

Many international cases of money laundering through commercial property have involved PEPs and high-level organised crime groups. 

Property developers

Property developers selling new houses or buildings may also be exploited by criminals. Many property development activities, such as construction, are outside the scope of this risk summary. However, developers who sell property without the assistance of a third-party real estate agent face the same risks as real estate professionals.