Flashy real estate agents preying on buyers in an aggressive property market could be slugged with huge fines under an underquoting crackdown.

Under proposed reforms, maximum penalties will soar from $22,000 to $110,000 to remove the financial incentive for agents to dupe anxious clients in Australia's most expensive property market.

Agents making more than that penalty will also come under the hammer, with fines of three times their commission.

But the industry questioned whether higher penalties would act as a deterrent or ministers were trying to "elevate their own importance".

Underquoting involves homes being advertised under the agent's reasonable estimate of the property's likely selling price.

While NSW law dictates it must be updated when, for example, a vendor rejects a high

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