Property market will see ‘pockets of softness’ but so far so good, says CBA CEO Matt Comyn

The property market has been ‘more robust and resilient’ than we’d expected, says CBA CEO Matt Comyn.

Commonwealth Bank CEO Matt Comyn says the property market has been more resilient than the lender had expected. Photo: NCA/ NewsWire Gaye Gerard

Commonwealth Bank boss Matt Comyn says the nation’s biggest home lender expects to see “pockets of softness” in property prices including inner city apartments, even though house prices had held up well so far during the pandemic.

Mr Comyn was speaking at a University of New South Wales Meet the CEO alumni event, held online on Wednesday.

On property prices, he said federal and state government policies and incentives, including the HomeBuilder grant, had “brought forward” demand and kept first home buyers and owner occupiers active in the market.

“So far the property market has been more robust and resilient than we’d expected,” Mr Comyn said.

“We do think there will pockets of softness... Some of the inner city areas, particularly for rental markets, because so many of the inner city apartments are dependent on people who are temporary or recent arrivals into Australia.

“So we do see some softness in some of those markets.”

But he said CBA had this month cut in half its initial forecast for a 10 per cent to 12 per cent peak-to-trough drop in house prices, as the economy and property demand fared better than the bank expected.

Mr Comyn also cautioned that the impact of COVID-19 was continuing to see “huge uncertainty” over the outlook domestically and globally, and changes had occurred “very rapidly”.

“We are recognising we are only six months in and there’s going to be some challenging times ahead, certainly into calendar 2021, (there are) so many different variables that are going to shape that,” he said.

His comments come as the banking sector faces a big task ahead as government income support measures start to wind back and lenders check in with customers who have deferred loan repayments.

At last count the banking regulator said there were $240bn in mortgages and business loans on repayment pauses across the economy.

CBA also expects Australia’s unemployment rate will peak near 9 per cent, despite the latest data showing a surprise drop in the jobless rate to 6.8 per cent from 7.5 per cent in July.

Mr Comyn said against the still challenging environment posed by of the pandemic, he remained upbeat on Australia’s longer-term prospects.

“I’m very optimistic long term for the performance, and also, the outlook for Australia as a country,” he added. “There is no question we are going to be challenged for the next few years, I think we are much better placed than just about any other country in the world, that’s going to take quite a bit of navigating through some of those incredibly uncertain times.”

Mr Comyn gave the online event a candid account of his early years at CBA and his rise through the ranks, including his pitch to the board to take the CEO job after predecessor Ian Narev flagged his exit.

Mr Comyn said his pitch included a “current diagnosis” of CBA, areas for improvement, what he planned to do in the role and what the priorities would be, while he also delved into his view on leadership and how he would work with the board.

“I did my best and I’m very fortunate to have been given the role and this enormous privilege and responsibility,” he added.

At the time, Mr Narev’s successor was widely tipped to be an external candidate given the issues CBA had run into with financial crimes regulator Austrac, some of which entangled Mr Comyn’s retail banking division.

Mr Narev’s departure came after CBA was gripped by the fallout of failing to meet anti-money laundering and counter terrorism financing laws, including a massive $700m penalty paid in 2018.

Mr Comyn also admitted banks had not had enough of a focus on non-financial risks such as conduct prior to the Hayne royal commission.

The UNSW event was introduced by the university’s chancellor and outgoing ANZ chairman David Gonski. Mr Comyn fielded questions from secretary of the NSW education department and former ABC managing director Mark Scott.