CBA has made its clearest statement yet that housing affordability is becoming a major issue within the Australian property market.
Speaking to the Parliamentary Standing Committee on the Big Four, Matt Comyn of CBA spoke of increasing problems with affordability for first home buyers and issues surrounding mortgage stress that have grown during the lockdowns in New South Wales and Victoria.
Comyn’s voice is now added to that of Westpac CEO Peter King, who told the same committee that housing affordability had become ‘stretched’ in Australia when he appeared earlier this month.
“In terms of increasing housing debt and increasing housing prices, I would say we are increasingly concerned,” said Matt Comyn.
“If we look at the performance of the housing market, it has shown, as have other parts of the economy, how resilient and robust it has been.”
“But if we look at the simple numbers and the relative growth rates of housing over the last 12 months, and if we look at the increasing rate of growth in credit versus the outlook for the increase in income, then per se I'm not concerned about the period that has gone but, as we have seen in other markets—New Zealand being a good example, but not limited to New Zealand; in many developed markets—it is much harder to act when the market is accelerating versus taking interventions to try to avoid too much of an acceleration.”
Comyn mentioned the proactive steps that his bank had already taken, such as raising their basis rate, to reduce the potential for mortgage stress.
“That mechanism is our preferred mechanism,” he said. “We think we and the industry could—obviously, I don't want to speak for the rest of the industry, but we think it would be important to take some modest steps, sooner rather than later, to take some of the heat out of the housing market.”
“I want to be clear: I'm not concerned about the point that we are at here, today, but, based on the acceleration, I think it would be prudent to act sooner rather than later.”
