The combined capital city preliminary clearance rate remains in the mid-high 70 per cent range for another week, while auction volumes decrease week-on-week. There were 2,646 properties taken to auction this week, down from 3,171 last week, when auction volumes reached their second highest level so far this year. Despite auction volumes shifting generally higher over the last few weeks, the weighted average clearance rate has remained relatively consistent, with preliminary results this week showing 78.1 per cent of the 2,121 reported auctions were successful, increasing from 74.5 per cent last week and also higher than the corresponding week last year when a 66.6 per cent clearance rate was recorded across a significantly lower volume of auctions coming out of the Easter period (1,582).
Be interest to see what this would look like if the agents had to comply with Anti money laundering legislation – https://www.macrobusiness.com.au/2017/03/report-australia-worlds-worst-money-laundering-property-market/
This assessment identifies the following 10 main problems that have enabled corrupt individuals and other criminals to easily purchase luxurious properties anonymously and hide their stolen money in Australia, Canada, the UK and the US:
Inadequate coverage of anti-money laundering provision
Identification of the beneficial owners of legal entities, trusts and other legal arrangements is still not the norm
Foreign companies have access to the real estate market with few requirements or checks
Over-reliance on due diligence checks by financial institutions leads to cash transactions going unnoticed
Insufficient rules on suspicious transaction reports and weak implementation
Weak or no checks on politically exposed persons and their associates
Limited control over professionals who can engage in real estate transactions: no “fit and proper” test
Limited understanding of and action on money laundering risks in the sector
Inconsistent supervision
Lack of sanctions
Australia has severe deficiencies under all 10 areas identified in the research and is therefore not in line with any of the commitments to tackle corruption and money laundering in real estate made in international forums.
In Australia, real estate agents are not subject to the provisions of the Anti-Money Laundering and CounterTerrorism Financing Act 2006. Other professionals such as lawyers and accountants who may also play a role in the sector are not covered either. This means that properties can be bought and sold without any due diligence on the parties. Currently there are no requirements for real estate agents or any professional involved in real estate deals to submit STRs, even if they suspect illegal activity is taking place, and there are no requirements or rules for verifying whether customers are PEPs or their close associates…
In Australia, Canada and the US, the current anti-money laundering framework shows a tendency to rely on financial institutions to conduct the necessary background checks on real estate transactions… there are no checks on cash transactions.
In Australia, 70 per cent of Chinese buyers pay in cash and they represent the largest proportion of foreign purchases in the country.