Homebuyers are back
CBA says rate cuts have stabilised market
COMMONWEALTH Bank chief Matt Comyn says there is now “an abundance of housing credit” available to borrowers amid signs Australia’s housing market has stabilised.
Mr Comyn told CBA’s annual general meeting in Sydney that the bank understood that low interest rates stemming from Reserve Bank cash rate cuts had created a headache for savers, but that they had also reignited borrowers’ appetite.
“Falling rates have contributed to a turnaround in some established housing markets,” Mr Comyn said yesterday.
“House prices are now rising in Sydney and Melbourne after having fallen for 18 months, and there are encouraging signs that the market has stabilised.”
He also noted that, while regulatory guidance for lenders had increased, the changes had improved lending standards and made the country’s financial system more resilient.
The prudential regulator in July also relaxed the affordability standards that lenders must impose on borrowers, boosting the flow of credit to owneroccupiers and investors.
“There remains an abundance of housing credit available,” Mr Comyn said.
He added that it seemed Federal Government tax cuts were having a positive effect, contradicting the Reserve Bank of Australia.
“There are signs that the Government’s recent tax cuts for many Australian families have supported the economy at this time,” Mr Comyn said.
Minutes from the RBA’s October meeting, at which the central bank cut the cash rate for the third time in five months, were released on Tuesday and showed board members believed they had seen no impact from tax changes or from earlier cuts.
“Members noted that there had not yet been evidence of a pick-up in household spending following the recent reductions in the cash rate and receipt of the tax offset payments, although they acknowledged that it may be too early to expect any signs of a pick-up,” the RBA minutes read.