Housing affordability requires a “broad” solution: CBA

Facing the House Economics Committee, the bank’s CEO has discussed negative gearing and property prices

Housing affordability requires a “broad” solution: CBA



Ian Narev, chief executive officer of the Commonwealth Bank of Australia (CBA) has not ruled out support for negative gearing reforms, saying that a broad approach to housing affordability is required.

Facing the House Economics Committee’s banking inquiry yesterday (7 March), Narev said that housing affordability was being tackled in the wrong manner despite being an “issue of great importance”.

Mentioning Bankwest’s recent decision to remove negative gearing benefits from its serviceability criteria, Labor's Matt Keogh asked whether CBA as a whole would take this step as well.

“We have not done it and we have no plans to,” Narev said.

Keogh broadened the question, asking about negative gearing and its ability to tackle housing affordability. In response, Narev warned that “tinkering” with individual policies could distort the market especially since there were impacts from both the supply and demand side.

“The starting point needs to be the wellbeing of Australians of which housing affordability is a part.”

He suggested a broad picture approach instead of debating individual policy measures.

Greens MP Adam Bandt asked whether housing prices in Sydney and Melbourne was over-inflated. While Narev didn’t think property was overpriced in these capital cities, he admitted it was difficult for younger people to afford purchasing a home.

Bandt also delved into whether CBA took climate change into account when writing new mortgages for homes in areas at risk of rising sea levels.

Narev straight out denied this, saying that it was difficult to implement climate policy as a major bank.

“I can imagine future inquiries if people were refused mortgage applications on the basis of climate change,” he said.

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