BoQ chairman Roger Davis said while Brisbane was at the forefront of speculation around a housing bubble bursting, the bank was well-positioned in the event of any volatility.
“We do remain wary of conditions in the residential apartment market, especially in Brisbane, where the RBA is warning that this financial year is ‘crunch time’ given the oversupply, low rental increases, tightening credit conditions and ongoing targeted macroprudential regulations,” Mr Davis said at the bank’s annual general meeting on Thursday.
The Reserve Bank has repeatedly singled out the tide of an apartment building in Brisbane as an ongoing concern, while many economists have forecast the RBA will be tied to flat interest rates into next year, with a possible rise late in 2018.
“BoQ takes some comfort from moderating east coast housing prices and risk conditions especially in Sydney and sees no evidence of any systemic weakness in its housing portfolio or substantive increases in its mortgage arrears,” Mr. Davis said.
Mr. Davis told shareholders at the Brisbane meeting that with growth easing, the bank would continue in its cautious approach to the mortgage market with a “conservatively positioned” portfolio.
He warned that in an economy now characterized by high household debt, low inflation, flat income growth, underemployment and potential increases in interest rates, any mismanagement could expose housing weaknesses
“This combination does pose risks for the housing market if the risk is not properly managed,” he said.