Bendigo chief pops claims of a bubble
Bendigo and Adelaide Bank chief executive Mike Hirst believes a recent rise in house prices, especially in Sydney, is nothing to worry about.
Recent figures from research firm RP Data show Sydney home prices are up 10 per cent since the start of the year.
But the rise has come after several years of weak growth in the Sydney property market, Mr Hirst told ABC TV.
"I think there's been relatively subdued growth leading up to this, so there's a bit of catch-up," he said. "Sydney seems to be the hottest spot and I think most people consider that it missed out on some of the rise in the earlier part of the decade."
Mr Hirst's comments echo recent statements from ANZ Australia chief executive Philip Chronican and Reserve Bank of Australia assistant governor Malcolm Edey.
The regional bank's chief also said Australian banks were doing a good job of maintaining prudent lending practices in an environment of low interest rates.
Mr Hirst said there was no need for more regulation of the industry than was already provided by the Australian Prudential Regulation Authority.
"The banks are still keeping their stress testing of serviceability at reasonable levels and APRA continued to remind us to be prudent with our lending and - as long as that's the case - I don't see a need for any other intervention," Mr Hirst said.
AAP
Frequently Asked Questions about this Article…
According to Mike Hirst, chief executive of Bendigo and Adelaide Bank, there are no signs of an imminent housing market bubble; he says recent price rises look like catch-up after several years of weak growth rather than a speculative boom.
Research firm RP Data found Sydney home prices are up about 10% since the start of the year, and Bendigo and Adelaide Bank CEO Mike Hirst says that rise appears to be a 'catch-up' after prolonged subdued growth earlier in the decade.
RP Data figures cited in the article show Sydney home prices are up roughly 10% since the start of the year.
Mike Hirst says Australian banks are maintaining prudent lending practices, keeping stress testing of borrowers' serviceability at reasonable levels, and continuing to follow APRA's guidance on being cautious with lending.
No — Mike Hirst told ABC TV he does not see a need for additional regulation beyond what the Australian Prudential Regulation Authority (APRA) already provides, as long as banks continue prudent stress testing and lending practices.
The article says Mike Hirst's comments echo recent statements from ANZ Australia chief executive Philip Chronican and Reserve Bank of Australia assistant governor Malcolm Edey, indicating a similar cautious but not alarmed view among some leaders.
RP Data supplied the recent market figures showing Sydney home prices have risen about 10% since the start of the year, data that underpins the discussion of whether a bubble exists.
Everyday investors can note that experts in the article view the recent price rise as catch-up rather than a bubble, that banks are said to be keeping lending standards prudent under APRA oversight, and that this reduces the likelihood of immediate systemic risk—though investors should always consider their own risk tolerance and do further research.
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