Bendigo chief pops claims of residential property '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 in prices comes 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 says Australian banks are 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.
"There's very prudent lending still going on here," he said.
"The banks are still keeping their stress testing of serviceability at reasonable levels and APRA continued to remind us be to prudent with our lending and as long as that's the case, I don't see a need for any other intervention."
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 told ABC TV the recent price rises don’t look like a bubble given several years of subdued growth beforehand.
Research firm RP Data reported that Sydney home prices are up about 10% since the start of the year, a figure cited in the article.
Mike Hirst said the recent rise appears to be a 'catch-up' after several years of weak growth in the Sydney market, noting Sydney seems to be the hottest spot and missed out on some earlier rises.
Yes. The article notes Hirst’s comments echo recent statements from ANZ Australia chief executive Philip Chronican and Reserve Bank of Australia assistant governor Malcolm Edey, suggesting a similar view among some industry leaders.
Mike Hirst says banks are doing a good job maintaining prudent lending practices in a low interest rate environment. He specifically mentioned banks are keeping their stress testing of borrowers’ serviceability at reasonable levels.
No. Hirst said there was no need for additional regulation beyond what the Australian Prudential Regulation Authority (APRA) already provides, as long as banks continue prudent lending and stress testing.
The article states APRA provides regulatory oversight and reminders to banks to remain prudent with their lending. Hirst indicated that APRA’s guidance helps ensure continued stress testing and responsible lending.
Based on the article, everyday investors can note that industry leaders see the recent price rise—particularly in Sydney—as a recovery after weak years rather than clear evidence of a bubble, and that banks are reported to be maintaining prudent lending and stress testing under APRA’s oversight.
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