Buyers warned about taking on too much debt by CommBank's Matt Comyn

The Commonwealth Bank boss was appearing before the House of Representatives economics committee

Buyers warned about taking on too much debt by CommBank's Matt Comyn
Buyers warned about taking on too much debt by CommBank's Matt Comyn

The CBA chief executive Matt Comyn has warned, with interest rates at record lows, that borrowers could be taking on too much debt.

He made the call for macro prudential measures while appearing before the House of Representatives economics committee.
 
Comyn said he was not particularly concerned about the current circumstances, but suggested it was prudent for regulators to take proactive regulatory action.

He thought it better for regulators to avoid harsher measures in the future, such as those imposed in New Zealand, given the apparent speed at which Australian capital city property prices are rising.

“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,” Mr Comyn said.

“I’m not concerned per se about the period just gone,” Mr Comyn said.

“But it’s much harder to act when the market is accelerating.”

He noted the current market strength was different to the investor and interest-only booms, which led to macro prudential speed limits in 2014 and 2017.

The emerging issue he said, was more macro than prudential, because there was no evidence of a widespread decline in lending standards.

“If we look at the simple numbers and the relative growth rate of housing over the last 12 months I am not concerned about the period just gone. But in terms of increasing housing debt and increasing house prices we are increasingly concerned,” Mr Comyn said.

“The bigger concern is the resilience of borrowers in a much higher interest-rate environment,” Mr Comyn said.

“An increase (in the floor servicing rate) is very easy to implement and could apply to non-banks as well as banks.”

The CBA chief said despite the recent lockdowns in NSW and Victoria, that there was no evidence of a material slowdown in loan applications.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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