Thanks to the Sydney Morning Herald on 03 Sep 2014 – thanks to Georgia Wilkins
ANZ chairman David Gonski has warned Australia’s booming housing prices cannot go on forever and the market will eventually experience a correction.
The former Future Fund chairman said ANZ and all the big banks were “very aware of history” when it came to financial lending in the residential mortgage market.
“There will come a time when there will be a correction,” he told the Australian British Chamber of Commerce.
“The fact is, anyone who believes prices always go up is, I think, a fool.”
Mr Gonski’s comments come as the housing market heats up as spring approaches. Capital city markets had their strongest winter since before the lead up to the financial crisis, according to figures released on Monday by RP Data.
Sydney and Melbourne house prices lifted 5 per cent and 6.4 per cent respectively over the three months to the end of August. The surge represents year-on-year growth of more than 16 per cent in Sydney and almost 12 per cent in Melbourne.
Brisbane, which was one of the weaker-performing cities, recorded a 1.3 per cent property value increase in the three months to the end of August.
The Reserve Bank warned in its submission to the Financial System Inquiry that moves to boost competition in the home loan sector could increase risk in the financial system.
Regional banks, credit unions and building societies have urged the federal government to change regulations that give the big banks a significant cost advantage when making home loans.