The Commonwealth Bank of Australia (ASX: CBA) share price closed at $87.80 today, down 0.13%.
The S&P/ASX 200 Index (ASX: XJO), meanwhile, closed 0.07% higher as the index managed to maintain its afternoon rally.
Why CBA isn't concerned about rising house prices
The Commonwealth Bank share price is up 5% so far this year. While that's a solid result for the big four bank, a company with a market cap of $156 billion, Aussie home prices have risen even faster, up 6.2%.
Should we be concerned?
Not according to Commonwealth Bank CEO Matt Comyn.
Addressing the House of Representative economics committee in Canberra yesterday on the rapid increase in Australia's home prices, Comyn said (quoted by the Australian Financial Review), "We are not overly concerned with what we are seeing at the moment in the context of broader financial stability."
Comyn said rising home prices tie into the strength of Australia's economic rebound, with the unemployment rate ticking down another 0.2% in March and GDP forecasts improving. He called the recovery in Australia's labour market "miraculous".
As the AFR reported:
CBA expected unemployment for the March quarter to come in at 5.7 per cent, just missing the actual result of 5.6 per cent. The bank expects unemployment to fall to 5 per cent by December 31, and to further decline to 4.7 per cent by the end of 2022.
As for dwelling prices, CBA has upped its forecast for 2021 from 8% growth to 10% for the full calendar year. "We expect house prices to continue to grow through this year and next, but not at the rapid levels we have seen in the first two months of the year."
Comyn also highlighted the falling number of deferred loans on the bank's books since the onset of the pandemic. He said that the 158,000 home loans CBA had deferred at the height of the crisis had now fallen to 3,000–4,000 deferred loans.
Commonwealth Bank share price snapshot
Though the average Australian house price may have outpaced the Commonwealth Bank share price so far in 2021, over the past 12 months that's certainly not true.
CBA shares have lifted 43% over the past full year, compared to a gain of 29% on the ASX 200.