The Commonwealth Bank has argued that Australia's housing market is steady and strong, and has dismissed any claims of a 'housing bubble'.
The nation's biggest lender believes that stable prices are underpinned by several factors - including great interest rate flexibility. "Improving affordability is likely to help prevent a significant fall in house prices," a slide prepared for the investor conference says.
Addressing a Credit Suisse investment conference in Hong Kong, Commonwealth Bank chief executive Ralph Norris said housing demand was supported by a "chronic" undersupply, as well as the first home buyers scheme and recent steep cuts in mortgage lending rates that had boosted affordability.
While house prices have been collapsing in Britain and the US because of an oversupply and the sub-prime lending crisis, Australian bank chief executives have been keen to sketch a starkly different picture of the local market.
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