The boss of Australia's biggest home lender has admitted he is worried about the rapid surge in house prices.
Commonwealth Bank chief executive Matt Comyn has become the first head of a major bank to raise the alarm about unsustainable debt levels as property values climb at the fastest pace in 32 years.
During a parliamentary hearing, Liberal MP Tim Wilson had asked him if he was concerned about mortgage stress, a situation where borrowers can't meet their monthly home loan obligations.
With the Reserve Bank of Australia cash rate at a record-low of 0.1 per cent, Australia's major banks are offering mortgage rates of just 2 per cent.
But Mr Comyn conceded he was worried about mortgage stress as more borrowers struggled to service their home loans.
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Commonwealth Bank chief executive Matt Comyn has become the first head of a major bank to raise the alarm about unsustainable debt levels as property values climb at the fastest pace in 32 years
'If you were to ask that question slightly differently in terms of increasing housing debt and increasing housing prices, I would say we are increasingly concerned,' he told the House of Representatives Economics Committee on Thursday.
In August, Australia property values soared by 18.4 per cent, marking the fastest annual growth since July 1989 when interest rates were at 17 per cent, CoreLogic data showed.
Sydney's median house price increased by a dramatic annual pace of 26 per cent to an even more unaffordable $1.293million, despite Australia's biggest city being in lockdown.
By comparison, Australian wages during the last financial year rose by just 1.7 per cent.
This means even more borrowers would have risky debt-to-income ratios of more than six where they owed the bank six times more than they earned.
Mr Wilson praised Mr Comyn for being the first bank boss to concede there was a link between rapidly rising house prices and debt.
In August, Australia property values soared by 18.4 per cent, marking the fastest annual growth since July 1989 when interest rates were at 17 per cent,. Sydney's median house price surged by an even more dramatic annual pace of 26 per cent to an even more unaffordable $1.293million (pictured are new houses for sale at Kellyville in Sydney's north-west)
'That's quite a statement. I agree with you but a lot of other banks that have appeared before this committee
