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Paying $15 million for a penthouse, even one with views of both the Sydney Harbour Bridge and Opera House from the outdoor hot tub, is feeling very 2025 as the slump in houses became a national phenomenon this week.<\/p>\n
Sydney and Melbourne are down more than 5 per cent from their peaks, according to property data group Cotality, while the property booms in Brisbane, Adelaide and Perth are now deflating as well.<\/p>\n
But the buyers of the luxury penthouse in Sydney\u2019s historic The Rocks district must have felt they got a bargain with its purchase last year, given the same property changed hands for $17.5 million in 2018.<\/p>\n
But the real winner appears to be the buyer of the sub-penthouse who picked it up for $9.4 million a few months later. It had changed hands for $14 million in 2019.<\/p>\n
Both properties had been acquired at these questionably high prices by the same party, but the original owners had a lot more to grumble about than the multimillion dollar losses on the two transactions.<\/p>\n
In 2020, the two properties were put under a restraining order by the AFP-led Criminal Assets Confiscation Taskforce (CACT) – a team set up to confiscate the illegal wealth and assets of organised crime syndicates.<\/p>\n
CACT successfully seized the properties in 2024 as a result of Operation Cabestro, a Melbourne-based investigation into large-scale fraud involving imported alcohol which defrauded federal coffers of hundreds of millions of dollars.<\/p>\n
The multimillion-dollar losses on the sales appear to confirm that money launderers are not that picky about the price, as long as their ill-gotten gains get converted into respectable wealth – and potentially with a capital gain to boot.<\/p>\n
To give an idea of how popular money is with our criminal class, since 2020, police have frozen about $1.2 billion in criminal assets. Two-thirds of that is related to property.<\/p>\n
Not any more. The criminal world\u2019s free ride from rising property prices has been cruelled – as it has for the rest of us – via higher interest rates and changes to the tax treatment of capital gains.<\/p>\n
The tantalising question is, what additional downward pressure has there been on housing prices from the changes to anti-money laundering provisions last month which means tens of billions of dollars in criminal proceeds now have to find a new home?<\/p>\n
On July 1, real estate agents, accountants and lawyers came under Australia\u2019s Anti-Money Laundering and Counter-Terrorism Financing Act for the first time.<\/p>\n
It means these parties will now have to know who their buyers and sellers are in any transaction and report any suspicious activity to police. A buyer can no longer just roll up to the selling agent with a boot load of cash and scant identification, no questions asked.<\/p>\n
Australia\u2019s financial crimes watchdog, AUSTRAC is in no doubt what impact this will have on house prices.<\/p>\n