Real estate companies are cracking down on money laundering after several buyers tried to purchase Auckland homes with cash deposits worth hundreds of thousands of dollars each.
Industry leaders have agreed to halt sales to any buyer who does not have proper identification at the time of purchase.
Real Estate Institute of New Zealand chief executive Colleen Milne said the new voluntary rule brought the industry into line with other sectors. It reflected the growing threat of criminals using New Zealand property to wash illegally sourced money - both domestically and from overseas.
She cited a handful of instances in the past six months in which buyers had tried to purchase Auckland properties using cash deposits of hundreds of thousands of dollars.
Authorities were alerted and police were involved, although she was unable to provide further details.
"We believe that property is definitely an area where money laundering is taking place. We want to regulate ourselves and put in place safeguards.
"It's quite hard to track but we see this as a deterrent. There have been instances where people have tried to pay deposits with cash."
Ms Milne said REINZ had persuaded its members against taking cash deposit payments and encouraged them to ensure money was deposited into bank accounts.
Lawyers already collected identification details but agents would now require ID such as a passport or driver's licence.
"We know it's something that's been tightened up across other industries."
Asked if the risk of money laundering was from particular countries or a domestic threat, she said: "Either, overseas and within New Zealand where the funds may have been obtained through non-legal activity."
The problem was worldwide.