Commonwealth Bank warns high house prices to hang over Australia for 10 years

CBA chief Matt Comyn has advised it might be ‘wise’ for businesses to keep their heads down during the looming federal election.

CBA CEO Matt Comyn speaks at the bank's Reimagining Banking Briefing.

High house prices are set to hang over Australia’s economy for the next decade, with Commonwealth Bank boss Matt Comyn warning prices and tight supply were causing “frustration and concern” among Australians.

The CBA boss, speaking at a business summit in Sydney, said he was concerned about the level of capital tied up in the housing market, noting it raised the question of whether cash should be ploughed into more productive parts of the economy.

Mr Comyn said he expected housing to dominate the national conversation, as many were worried about high prices.

“I think it will be one of the dominant themes for the next five to 10 years, certainly for us, but I think more broadly and socially,“ he said.

CBA is Australia’s largest home lender, with almost $600bn in mortgages, of which almost $380bn are with owner-­occupiers.

The 49-year-old CEO said the price of housing was a consequence of the tax system as well as rising wealth, among an array of factors that drove Australia’s obsession with houses.

“I think there’s a good challenge about whether there should be more lending to productive parts of the economy,” he said.

Mr Comyn said CBA had lent circa $50bn in the housing market over the last years.

But he said Australia had to get better at financing, building and empowering a number of industries, not just housing.

Mr Comyn said there was also a global conversation taking place around regulation of a range of different industries, posing the question of whether this had affected the competitiveness of different industries.

The CBA boss said the bank had enjoyed a “very constructive” relationship with the federal government in recent years, but it might be “wise” for businesses to keep their heads down pending the looming federal election.

Mr Comyn said he expected this to change after the election, as there were a number of “important topics” for any government to grapple with.

He said some issues were longstanding, while others were new and emerging.

The CBA boss said he hoped to work constructively with any new government, noting the bank had built a good relationship with the Albanese government and its preceding administration under Scott Morrison.

But Mr Comyn said Australia’s three-year election cycle should be longer, as the current short terms were “defeatist”.

Mr Comyn said longer cycles were inevitable, but this was not an excuse to not make the best of the situation of the current electoral cycle.

The CBA boss said there was a need to act on generational inequity in the housing market.

Originally published as Commonwealth Bank warns high house prices to hang over Australia for 10 years