ANZ doesn't see housing bubble

ANZ deputy chief executive Graham Hodges told a federal parliamentary inquiry into home ownership last week ANZ did not see any housing bubble.

The rapid rise in house prices in Sydney in the past couple of years had followed a long period of flat prices from the 2000s to around late 2010, he noted.

"I think these price movements do tend to go a little bit in waves, but clearly it's an expensive city to buy a house in," he told the inquiry on Friday.

"It certainly does affect affordability, but we wouldn't say it's necessarily a bubble."

The ANZ submission said the housing sector continued to see considerable activity and new investment, and was performing more strongly than much of the rest of the Australian economy.

"Housing price rises, especially in Sydney and Melbourne where foreign investment in residential real estate is greatest, are attributable to a combination of factors: underlying demand for housing, positive market sentiment, and the construction industry responding to these conditions.

"Outside Sydney and Melbourne, housing sales, prices and construction are more subdued.

"The housing market in these regions reflects the flat economic conditions and does not benefit from strong investor demand."

It advised in the absence of an unexpected sharp economic downturn, ANZ remained optimistic about the housing market outlook.

"Supply continues to be tight relative to demand and an extended period of low interest rates is expected."