Commonwealth Bank chief executive Ian Narev called on policymakers to do something about housing affordability and stagnant wage growth.
Mr Narev said while the economic data suggested all was well, it didn’t match the “qualitative view of the economy, which feels like households are doing it tough and feel stretched.
“The absolute key and No.1 question we should be demanding of policymakers is for households to feel better off, and the No.1 metric is wage growth,” he said at the Morningstar Individual Investor Conference in Sydney on Friday.
“It’s an important policy discussion we ought to have. We must have that discussion around the full range of supply and demand factors – it’s a very important part of the housing equation.”
He said it was hard to determine if property was overvalued or undervalued but “the action is where you expect the action to be” given the backdrop of increased foreign demand, population growth and undersupply. That is, most of the appreciation has occurred in Sydney and Melbourne.
“The concerns aren’t if rates go up they won’t be able to afford mortgage, the concern is they will able to consume less to meet their mortgage and over the medium term that can weaken the economy.”
Via Big Sleazy today:
QED!
