NAB chief Ross McEwan calls for supply boost to ward against housing heat

Without decisive moves to boost housing supply, prices will lift ‘further and faster’, says National Australia Bank boss Ross McEwan.

NAB chief executive Ross McEwan. Picture: Aaron Francis/The Australian

National Australia Bank boss Ross McEwan has urged governments to extend supply in the rampant housing market and facilitate the return of international students, as key measures to help the economy’s rebound.

Addressing the Standing Committee on Economics in Canberra on Friday, Mr McEwan said action was required on supply issues in the housing market to ward against creating more heat in prices.

“I strongly support first home buyer incentives, but we know supply is restricted and the states need to streamline approval processes for land development and residential construction,” he said.

“Without decisive moves to increase housing supply, demand side incentives will inevitably act to push up house prices further and faster.”

His comments echo those of Westpac chief executive Peter King who has highlighted supply problems in the housing market that are exacerbating price growth.

Mr McEwan said house prices may rise “in excess” of 10 per cent this year, a marked change to the 8 per cent to 10 per cent decline the bank was estimating as COVID-19 started to dent economic activity early last year.

He also pointed to the return of international students to Australia as being “critical for growth and bringing life back” to central business districts around the nation.

“The biggest challenge our customers tell me they are facing is finding people to work. Businesses need labour for seasonal jobs and to meet surging demand in areas such as construction, parts of tourism and hospitality, and aged care,” he added.

NAB wants individuals and companies to support the rollout of the COVID-19 vaccine and for federal and state governments to develop a national plan for living with the virus.

“Short term lockdowns in capital cities disrupt travel plans, they undermine confidence and deter activity,” Mr McEwan said, adding that further travel bubbles such as that with New Zealand would also buoy the economic recovery.

“More of these arrangements are needed. This will show that Australia can manage international arrivals which is critical for confidence.”

Mr McEwan also suggested large companies like NAB could help to accelerate the COVID-19 vaccine rollout by overseeing the jab in the workplace.

“Last week as I had my flu shot at work, I was considering how large employers like NAB could assist with the rollout of the vaccine. We would be happy to do so at the right time,” he said.

More broadly, Mr McEwan noted clear signs of a business recovery in Australia and companies should lead the shift to growth.

“While there is a lot of attention on the resurgent housing market, as Australia’s biggest business bank we are seeing clear and widespread signs of businesses getting going again,” he added.

“Our bankers are approving more loans to businesses than before the pandemic. New and increased lending to small and medium sized businesses is up. NAB’s agricultural equipment finance sales for example have grown 130 per cent in the last 12 months.”

On potential mergers and acquisitions, Mr McEwan declined to comment on any interest the lender may have in Citigroup’s local operations or Suncorp’s bank.
Responding to questions by the committee, Mr McEwan said it was inappropriate to comment.

“I won‘t be able to answer that question for you,” he said, ”Every business … will look at areas that may add to the customer service.”
NAB is awaiting approval from the banking regulator on its proposed purchase of digital bank 86 400, announced in January.