CBA CEO Flags Unsustainable Housing Credit Amid Market Surge

Australia’s largest bank is raising a rare note of caution. Commonwealth Bank CEO Matt Comyn has flagged that housing credit growth might be running at levels that are not sustainable, even as property prices in major cities continue to climb.

Speaking to MPs during a parliamentary Economics Committee hearing, Comyn highlighted that total housing credit growth currently hovers around 6 per cent, slightly higher for investor loans. “For long-term financial stability, a slightly lower level of credit would be preferred,” he said.

Housing Market Heating Up

Recent data from the Australian Bureau of Statistics shows that new dwelling loan commitments increased 6.4 per cent year-on-year in the September quarter of 2025, with the total value of loans rising by nearly 10 per cent. Investor loans in particular have been climbing, sparking debate over whether regulators should intervene to slow demand.

Senator Barbara Pocock recently called on APRA to curb investor lending, arguing that it has become “the largest unacknowledged leviathan of house price inflation.” She emphasized the importance of prioritizing loans for owner-occupiers rather than investors.

Low Mortgage Defaults Amid Stable Employment

Despite rising credit growth, Commonwealth Bank reports that mortgage loss rates remain very low, largely thanks to low unemployment levels over the past four years. Currently, 85 per cent of mortgage customers are ahead on their repayments. Comyn cautioned that any change in unemployment could quickly affect these figures.

The bank is also watching how housing demand responds now that further rate cuts are no longer widely expected, hinting at a possible moderation in market activity.

Broader Economic Concerns

Comyn also painted a sobering picture of the global economy, citing structural forces such as geopolitical tensions, shifts in trade, technological transformations, decarbonization, and demographic changes. These trends, he noted, demand resilience from financial institutions to safeguard both their operations and the broader banking system.

He stressed that banks must maintain profitability not merely for returns, but to cover expected and unexpected risks associated with lending. For instance, a $500,000 loan requires setting aside $15,000 for potential losses, which can rise sharply if repayments falter.

As the House of Representatives Economics Committee continues hearings with Australia’s major banks, issues like mortgage interest rates, bank fees, regional branch closures, scam protection, and AI adoption will be closely scrutinized. Comyn’s remarks underline the delicate balance between supporting housing markets and ensuring long-term financial stability.