The rampant real estate market has presented a golden opportunity for criminals to launder millions of dollars in drug money in Australia over the past 12 months, according to police.

Evidence of criminal cash entering the already inflated local housing market has emerged as the federal government considers imposing tighter regulations to prevent properties being bought with the proceeds of crime.

Big apartment developments are most at risk, given foreigners are restricted to buying "off-the-plan" and newly-built homes under Australian law. Credit:Robert Shakespeare

New measures being weighed up by Justice Minister Michael Keenan and the anti-money laundering agency Austrac are expected to include requirements on real estate agents to do more to authenticate the source of funds being used to buy properties and the identities of buyers.

The real estate industry is expected to push back at any move to put the onus of proof on agents, with the Real Estate Institute of NSW warning on Friday that the government - which it claims has not yet consulted with it - would be creating a "legal minefield".