ANZ Bank says a lack of political will has seen successive Australian governments fail to extend money laundering laws to cover lawyers, real estate agents and accountants.

Key points: Australia's anti-money laundering law does not cover real estate agents, lawyers and accountants

Australia's anti-money laundering law does not cover real estate agents, lawyers and accountants The lack of regulation makes Australia an attractive target for money launderers, says ANZ

The lack of regulation makes Australia an attractive target for money launderers, says ANZ Real estate and law bodies have raised concerns over cost of new legislation

Australia's hot property market is an attractive haven for criminals, with estimates that billions of dollars of dirty money is being laundered through residential property.

Australia's anti-money laundering law does not cover real estate agents, lawyers and accountants, despite promises when the law was enacted in 2006 that the legislation would be widened.

ANZ's head of financial crime, Guy Boyd, is scathing of the failure of subsequent governments to extend the legislation.

"There's been probably a lack of political will and that's probably been driven by some very vocal opposition from those industry sectors," Mr Boyd told the Business in an interview.

Money laundering occurs when criminals channel money from illegal assets or activities into legal assets such as a trust fund or by buying property in an attempt to "clean" the money.

Federal Justice Minister Michael Keenan defended Australia's anti-money laundering regime.

"We do have very robust arrangements in Australia, including for property, but we are looking at how we can improve those arrangements," Mr Keenan said at a press conference in Sydney on Wednesday.

Australian real estate 'attractive destination' for money laundering

Australia's anti-money laundering (AML) legislation covers organisations including banks and money changers.

Mr Keenan said industry consultation on extending the laws was continuing.

International bodies like the Financial Action Task Force and Transparency International have slammed Australia's lack of action on forcing lawyers, real estate agents and accountants to report suspicious transactions.

Mr Boyd said the lack of regulation makes Australia an attractive target for money launderers.

"I think Australian real estate is obviously an attractive destination for capital, both legitimate and illegitimate," he said.

"I wouldn't know if I would call it a haven but certainly it is a place of choice for illegitimate money."

AUSTRAC, Australia's financial crimes regulator, said in a report two years ago that the laundering of illicit funds through real estate was "an established money laundering method in Australia".

It said around $1 billion in suspicious transactions came from Chinese investors into Australian property in 2015-16.

Australia's housing market has been targeted by money launderers from countries including Papua New Guinea, Malaysia and China.

Dudley House, student accommodation in inner city Melbourne, was bought at a significantly inflated value by Malaysian officials.

Dudley House (pictured) was bought at a significantly inflated value by Malaysian officials. ( ABC News: Peter Drought )

Thomson Reuters financial crimes analyst Nathan Lynch said the lack of regulation covering gatekeepers like lawyers makes Australian property a weak link for criminals.

"The money flows to the path of least resistance and in reality that is the property sector," Mr Lynch said.

Real estate, law bodies raise concerns about extending laws

The Law Council of Australia opposes the extension of the laws.

Executive board member Konrad de Kerloy said lawyers were already heavily regulated and the implementation of new AML laws would fall on professionals in rural and regional Australia.

"Whilst no lawyers want to be involved in wittingly or unwittingly in money laundering, the question is really, does the cost justify the imposition of an extra layer of regulation on lawyers?" Mr Konrad said.

The Real Estate Institute of Australia is also concerned about the cost of new legislation.

Malcolm Gunning says real estate agents will need more education on the law. ( ABC News: Sue Lannin )

President Malcolm Gunning said the institute supports changes to AML laws but said real estate agents will need training to bring them up to speed.

"The Real Estate Institutes are not opposed to it, but the concern is the responsibility that goes with it and the education that is required to be able to enact that," he told the Business in an interview.

"Real estate agents aren't lawyers, they don't study the law in depth, so if we are to be gatekeepers as with the conveyancers and say, necessarily the accountants and the advisers, then we need to be better educated."

AML laws in New Zealand overtaken Australia

New Zealand was left heavily exposed by the Panama Papers, but the country has now overtaken Australia and passed laws that require gatekeepers to report suspicious deals.

New Zealand lawyer and anti-money laundering expert Gary Hughes said the legal industry had accepted that new AML laws were needed.

"In New Zealand, people are concerned about it in the professions, lawyers and accountants, but there is sort of a grudging resignation that this needs to happen and it's really how can we implement it in the right way," Mr Hughes said

ANZ's Mr Boyd said Australia could learn from New Zealand.

"In New Zealand their company registry is free to access, it's quite good information — contrast that with Australia, you have to pay, the quality of the information is questionable," he said.

However, Mr Lynch from Thomson Reuters warned if AML laws are widened then property prices could be hurt by fewer big deals.

"Failing to crack down on laundering through property and lawyers and accountants and other groups that aren't regulated

and should be regulated, it distorts the entire market," he said.

"Prices can really go up high when you are allowing this to happen, and then the problem is when you introduce laws to tackle it you can get a deflation in the market.

"Costa del Sol in Spain is a good example of that happening."

If the laws are passed, AUSTRAC faces another challenge.

It will see the number of organisations it has to monitor jump from 14,000 to more than 120,000 regulated entities.