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CBA chief Ralph Norris has warned that the government’s enhanced first home buyer incentives don’t “come without risk” and urged his fellow lenders to exercise prudence when it comes to first home buyers.
“As banks we’ve got to take a very close view from a credit perspective and risk perspective as to whether or not these potential buyers will get themselves into trouble, particularly when we’re in an environment where we know unemployment’s going to increase and some of these people may well be susceptible,” Mr Norris said, according to The Australian Financial Review.
While Nr Norris was confident Australia was safe from any US type fallout he said CBA had tightened its credit criteria and was asking borrowers to contribute their own savings as a deposit.
“Interest rates are at a 45 year low... so therefore if you have people leveraging themselves... you’ve got to make sure in the servicing criteria that you are adding a stress test around higher interest rates going forward.”
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