ANZ chairman David Gonski says a correction in the housing market is inevitable amid growing concerns that soaring house price growth in the capital cities risks further inflating a property bubble in Australia.
After new statistics this week showed that house price growth accelerated in the past three months, Mr Gonski said in Melbourne today that all the banks “are very aware of history”.
“They know that you can have the growth in prices that we have had and over time and there will be a correction,” Mr Gonski said.
“I don’t know whether it is going to happen tomorrow, at five o’clock this afternoon or in three months. I have no idea. But the fact is anybody who believes that prices will always go up is a fool,’’ he told a lunch staged by the British Australia Chamber of Commerce.
The latest statistic showed 15 per cent annualised capital growth across the eight capital cities in the last quarter.
Auction clearance rates on average across the nation were 70 per cent last weekend and 80 per cent in Sydney.
But Mr Gonski said that provided the proper checks and balances were in the system, there was no reason to curb housing lending.
“I think what you have to do is be prudent, look at the risks carefully. You have to remember that you have proper prudential checks so people can afford to do what they are doing,” he said.
“If that is the case they should be allowed to have the wonderful experience of borrowing money and buying a house,’’ he said.