Australia’s Housing Shock: What CBA Just Revealed

Commonwealth Bank CEO Matt Comyn made headlines this week after urging Canberra to slash migration to around 180,000 a year. That single comment dominated the news cycle, sparked political backlash, and drowned out everything else he said. Yet the real warning wasn’t about immigration; it was the underlying message that almost no one paid attention to, as he quietly signalled that Australia’s housing and credit system is under far more strain than most people realise.

On the surface, he framed the suggestion to ease pressure on housing and infrastructure, which sounded reasonable and even responsible. Yet, if you look deeper, his intent becomes unmistakable. This wasn’t a plea for affordability or national harmony; it was the CEO of Australia’s biggest mortgage lender hinting that the entire system is starting to crack.

Rising pressure in the housing market

CBA sees what most people don’t: runaway home-loan demand, house prices accelerating at full speed, and a credit growth rate so strong that even Comyn said it is now “higher than policymakers might be comfortable with.” When the man whose profits depend on mortgages starts waving the cautionary flag, it’s as close as you’ll ever get to an economic confession.

We all know that banks love higher house prices as they inflate loan books and keep earnings flowing. But on the flip side, they also fear them because, as prices rise, households become more stretched, which makes the mortgage market more fragile. As borrowers move too close to the edge, a single economic wobble can turn a healthy loan book into a dangerous one.

The real message from the head of CBA

Competition is tightening the noose even further. Smaller lenders and non-bank financiers are aggressively loosening standards to win market share. The big banks know this and feel the pressure, but they don’t want to be dragged into a race to the bottom.

Comyn’s migration comments weren’t about compassion; they were about control. Control of housing demand, credit growth, and a system drifting beyond the banks’ comfort zone. If prices keep exploding, the major banks will face political heat on one side and competitive pressure on the other, while risk quietly builds beneath them.

What does this mean for investors?

Homebuyers shouldn’t expect affordability to appear magically. Migration may become more manageable, but demand remains sticky, housing supply is broken, and no government wants to be remembered for tanking property values. Comyn’s comments point to one conclusion: prices are unlikely to fall in any meaningful way.

That said, buyers still need to stay grounded. A market running this hot can turn fragile quickly, so stepping in without a disaster-proof plan is risky. Even strong housing cycles can crack under the weight of stretched borrowers, higher rates, or a sudden economic shock. Treat every purchase with a clear buffer, a realistic budget, and a plan for worst-case scenarios rather than assuming the market will always rise.

Investors should take note as well. Markets such as Melbourne, currently the slowest of the major cities, could turn into some of the best buying grounds. When the heat shifts and sentiment cools, lagging cities often become the most attractive opportunities.

This moment is also a reminder that financial cycles never move in straight lines. Canberra won’t save you, nor will the banks, and waiting for perfect conditions is a losing strategy. The smart move is to understand the macro forces shaping money and position yourself before the next turn, not after it happens.

What are the best and worst-performing sectors this week?

The best-performing sectors include Real Estate, up over 1 per cent, followed by Consumer Discretionary, slightly up 0.05 per cent and Consumer Staples, slightly down 0.01 per cent. The worst performing sectors include Information Technology, down over 3 per cent, followed by Utilities and Financials, both down over 2 per cent.

The best performing stocks in the ASX top 100 include Lynas Rare Earths, up over 10 per cent, followed by Pilbara Minerals, up over 9 per cent and Charter Hall Group, up over 8 per cent. The worst-performing stocks include Technology One, down over 10 per cent, followed by Origin Energy, down over 4 per cent and Worley Limited, down over 3 per cent.

What's next for the Australian stock market?

The selloff intensified earlier this week, with the All Ordinaries sliding another 2 per cent. However, Thursday brought a welcome surprise, with buyers stepping in aggressively, erasing roughly three-quarters of the week’s decline and leaving the index down just 0.8 per cent by the close.

It’s encouraging to see strong demand returning around the 8,700 level, though buyers will need to follow through next week to confirm that this rebound has staying power. If selling resumes next week, November could end up the worst since 2008, when the index fell 15 per cent during the GFC, which is hardly the kind of finish investors expect heading into year-end.

What’s equally striking is how quickly the gains over the past few months have vanished. The index has essentially unwound everything it achieved since July, despite a year defined by extreme swings. A 16 per cent plunge from February into April’s low was followed by a sharp 28 per cent rally to new all-time highs, only for the market to slide right back toward where it began the year.

This level of whiplash highlights a market still searching for direction. It reinforces that “set and forget” doesn’t work in conditions this unstable, as volatility requires vigilance, adaptability, and active decision-making.

Looking ahead, the big question is how much strength buyers can generate off the 8,700 base. If they can push decisively through the 9,000 level, December could well carry the index back toward its all-time high. But if 8,700 gives way, a pullback toward 8,500 is the more probable path, which still sits comfortably within the long-term uptrend that began after the March 2020 recovery.

In times like these, context matters. This pullback was overdue, and the index is now returning to a more sustainable rise. The real opportunity lies in preparing for the sentiment snapback, because once momentum turns, this market has shown it can rebound quickly.

For now, good luck and good trading.

Dale Gillham is the Chief Analyst at Wealth Within and the international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of the award-winning book Accelerate Your Wealth—It’s Your Money, Your Choice, which is available in all good bookstores and online.

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