CBA Boss Comyn: House Prices Won’t Bottom Until Well Into 2027

Commonwealth Bank CEO Matt Comyn told ABC radio on Wednesday that Australian house prices will not hit bottom until well into 2027, as the nation’s largest home lender sticks to its forecast of a 9% national price fall. Capital city prices have already dropped 4.3% over the September quarter, with Sydney down 8.6% from its February peak. The outlook matters for the 102,594 Australians who entered the market using the federal 5% deposit scheme, many now facing negative equity as values plunge.

When CBA expects prices to stabilize

Matt Comyn said Commonwealth Bank economists still expect house prices to fall 9% nationally and will not reach bottom until well into 2027. The Reserve Bank lifted the official cash rate last week to its highest level since late 2011. Comyn flagged that the RBA will likely revisit rates around November when it reviews quarterly inflation data.

How deep the downturn could go

Capital city prices fell 4.3% in the September quarter, with Sydney leading the correction at 8.6% below its February peak. Melbourne values are 7.2% below their cyclical high in November last year. AMP forecasts a grimmer scenario where prices could plunge as much as 15%, leaving recent borrowers in severe negative equity. Under that scenario, national home values would fall by A$139,971, while Sydney prices would drop A$241,057.

First-home buyers caught in the squeeze

More than 100,000 Australians who used the federal government’s 5% deposit scheme now face the risk of owing more than their homes are worth. In Victoria, 33,413 first-home buyers accessed the scheme in the past 12 months, while 28,158 buyers in NSW signed up during the same period. Cotality research director Tim Lawless said 97% of capital city suburbs were down in value over the three months to end September, highlighting the depths of the downturn.

The feedback loop hampering new supply

Ray White chief economist Nerida Conisbee warned that the market has become more complicated than simply lower house prices. Rising interest rates push established prices lower while the budget has weakened rental property supply, creating pressure on rents which rose 5.5% in the September quarter. Since end-2019, new dwelling costs have risen 48%, making it harder for developers to justify new projects when established prices fall. Fewer projects mean fewer homes built, worsening the housing shortage. Negative equity threatens recent low-deposit buyers if they need to sell during financial stress.

Final Thoughts

Comyn’s well-into-2027 timeline signals prolonged pain for borrowers and investors. Meyka grades CBA a B with a 12-month forecast of A$172.98, suggesting the bank’s own valuation reflects cautious market conditions. Investors should watch November RBA decisions closely.

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