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CBA boss expects a 10-12% drop in housing prices

Yesterday, the Commonwealth Bank delivered a full-year cash profit of $7.3 billion, along with welcome news that the property market had been more resilient than first feared.

In May, CBA chief executive Matt Comyn detailed a worst-case scenario, in which values would drop by 30 per cent. Yesterday, he was more optimistic.

โ€œI think a reductionโ€ฆin the order of 10 to 12 per cent is still a reasonable assumption,โ€ Mr Comyn revised.

โ€œWe do have an expectation that in some areas, particularly in inner-city areas, there has been downward pressure on rental yields, so we think that thatโ€™s going to weigh on house prices.

โ€œWe would say overall, and looking at the numbers in the last few months, the housing market has been more robust than perhaps we would have anticipated from March.โ€

The bank also revealed modelling predicting the national unemployment rate will spike at 9 per cent this year, before dropping to 7.5 per cent by December 2021.

โ€œThereโ€™s going to need to be some policies and investments at both the federal and state level to support greater jobs creation so we can bring that unemployment rate down,โ€ Mr Comyn explained.

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Nathan Jolly

Nathan Jolly was an in-house journalist with Elite Agent. He worked with the company from July 2020 to December 2020.