The CEO of Westpac, Peter King, has told a Parliamentary Committee that housing affordability in Australia is ‘stretched’ and a pressing concern for the economy.
Mr King was speaking to the House of Representatives standing committee on Economics hearing into the Four Major Banks, where he and other Big Four bank CEOs regularly appear.
“It’s at the worst level it’s been for some time,” said King of housing affordability. “When we look at housing affordability at the moment it’s pretty stretched.”
“All asset prices have gone up with low-interest rates and plenty of money in the economy. We’ve still got more demand than supply, so that’s pushing prices up.”
NAB CEO Ross McEwan also addressed the issue, describing his bank’s ‘major concerns’ about how the upward trend of house prices in Australia would eventually make home ownership difficult for Australians.
The CEOs of CBA and ANZ will also appear before the committee, in a second hearing to be held on September 23.
In the opening submission to the committee, the Westpac CEO also laid bare the scale of mortgage deferrals that his bank is currently dealing with.
“Currently we have $2.75 billion of mortgages with repayment deferrals. To give this number some context, total deferrals last time peaked at $55 billion,” read the statement.
“In small business loans, total deferrals are $70 million, compared to a peak of $10 billion last time.”
“Small businesses are showing particular resilience. Many have pivoted or evolved their operations and supply chains so they can better withstand lockdowns.”
READ MORE: Are brokers the weak link in the fight against financial crime in Australia?