Commonwealth Bank CEO Matt Comyn doesn’t expect house prices to fall much this year and has expressed confidence in the health of the economy and the availability of credit.
Having reported an interim profit of $4.77 billion for the nation’s biggest home lender, Comyn suggests housing credit will probably slow as demand remains weak – but house prices will not rapidly fall.
“I certainly do not subscribe to the theory that there is going to be a rapid acceleration in downward pressure on house prices,” he says, noting that even with a decline in Sydney, house prices remain 60% higher than five years ago.
Comyn’s comments align with those of Reserve Bank governor Philip Lowe on an orderly correction in the housing market.
Lowe says: “Importantly, unlike most other housing price corrections, this one has not been associated with rising unemployment or higher interest rates. Instead, mainly structural factors, relating to the underlying balance of supply and demand, in our largest cities have been at work.”