ANZ far more optimistic about property growth than banking peers
ANZ has far greater expectations of the property market than its banking peers, sticking to its property price growth prediction of 17 per cent this year alone.
ANZ was the last of the big four to take a seat in front of the house economics committee, with the bank’s chief, Shayne Elliott, copping an equal number of questions about the property market and the state of the bank’s loan structure.
Unlike the other three, all of which foresee property price growth of 10 per cent in 2021, Mr Elliott reiterated the bank’s confidence in a 17 per cent price boost.
Although he did warn his fellow bankers and regulators to watch price movements closely, Mr Elliott opined that there is no cause for alarm.
“We agree that price increases need to be watched and credit standards maintained to ensure the financial system remains stable,” he told the committee on Friday.
Addressing the RBA’s interest rate decision, Mr Elliott said ANZ is assessing its customers based on their ability to meet higher rates in the future.
Similar to the other big four bosses, he expressed his dislike of macro-prudential policies, noting that limiting lending will disproportionately impact first home buyers.
CBA boss Matt Comyn shared similar sentiments on Thursday, noting that the bank is “not overly concerned with what we are seeing at the moment in the context of broader financial stability”.
The bank’s confidence is underpinned by the fact that the mix of buyers doesn’t resemble previous cycles, with owner-occupiers currently making up 75 per cent of applicants.
And, like CBA, ANZ loans to first home buyers are up by 75 per cent in the first three months of 2021, with HomeBuilder said to have been a key driver behind the spike.
ANZ’s latest research, published in late March, predicted property growth of 17 per cent in the major cities.
According to ANZ’s senior economist, Felicity Emmett, house prices in Sydney and Perth are predicted to jump by 19 per cent each in 2021, followed by Hobart, which is predicted to rise by 18 per cent.
Melbourne and Brisbane are tipped to grow by 16 per cent each, with Adelaide lagging behind with 13 per cent growth in 2021.
The economist noted at the time that owner-occupiers are driving the market.
“Buyers are taking advantage of historically low interest rates, particularly fixed rates, as well as various government support programs,” she said.
“First home buyers are also benefiting from government support in the form of First Home Owner Grants and reduced stamp duty.”
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