Westpac CEO Peter King has highlighted a lack of housing supply as a major problem for the nation and a reason for climbing property prices.
King says a strong bounce back in house price growth has been an outcome of the Federal Government and the Reserve Bank moves to stimulate borrowing and economic activity to help the recovery from the pandemic recession.
But he says supply issues in the market are exacerbating house price growth.
“In relation to what’s driving housing prices, from my perspective it’s supply and demand,” he says. “One of the ratios we look at is new listings to sales and it’s still out of whack, with more sales than new listings.
“I don’t think bank debt is a driver of the housing prices, I think it’s a fundamental supply-demand issue.”
The strength in demand for housing is echoed by Mortgage Choice CEO Susan Mitchell who cites a rush of first-home buyers. “Everything has blossomed – it’s just been an incredible period of time,” she says.