A recent PEXA survey has unveiled critical insights into how the Australian property sector views the upcoming anti-money laundering (AML) reforms. The study, which surveyed more than 200 lawyers and conveyancers, along with 100 real estate agents, provides a clear picture of where the industry stands on these significant changes.
Many respondents noted that the changes would add another layer of complexity to transactions, and expressed concern about the increase in time, workload and costs to meet the compliance obligations. The issue was of particular concern among small business owners who are not resourced or equipped to carry substantial regulatory burdens.
The survey revealed three major areas of concern across all respondents, with more than half of the respondents citing concerns about:
To add to this, the federal government estimates the cost for implementation to be $1.5bn to the Australian Economy plus $1.2bn in ongoing annual costs which aligns with the experience in New Zealand and the UK.
The survey revealed strong industry support for the underlying objectives of these reforms. Enhanced market integrity and transparency emerge as key benefits, with respondents indicating that more rigorous verification processes and transaction monitoring will strengthen the Australian property market’s reputation both domestically and internationally.
This improved market standing is expected to attract more legitimate investors who value regulatory clarity and stability.
The reforms also present a robust framework for combating illegal activity in property transactions. By requiring all participants in the property supply chain to monitor and report suspicious activities, the new regulations create multiple checkpoints that make it more difficult for bad actors to use real estate for money laundering.
This multilayered approach to detection and prevention was viewed by survey participants as a positive step toward a more secure property transaction ecosystem.
For small business owners, the survey highlighted significant concerns about resource limitations and operational costs. Unlike larger firms with dedicated compliance teams, small practices often operate with lean staffing and limited administrative support.
The implementation of new compliance systems, staff training programs, and ongoing monitoring processes represents a substantial financial investment that many small practices worry will be difficult to absorb without impacting their pricing structure or profitability.
The maintenance of efficient service delivery under these new obligations emerged as another critical concern for small practices. Many respondents who pride themselves on providing personalised, efficient service to their clients expressed concern about how the additional administrative burden of AML compliance could impact transaction timeframes.
There’s considerable concern about maintaining current service levels while implementing new compliance processes, particularly during the initial transition period.
