"People just aren't coming anymore"
ANZ is shutting five more Victorian branches – a move chief executive Shayne Elliott said is part of a trend.
The bank is closing branches at Torquay, Reservoir, Collingwood, Hampton and Port Melbourne.
Elliott told talk radio station 3AW’s Neil Mitchell that the closures were part of a trend that the COVID-19 pandemic did not create, but merely accelerated.
“People just aren’t coming to the branches anymore,” Elliott said. “COVID exacerbated a trend.”
More and more Australians are eschewing branches for online banking.
Elliott said transaction numbers were up 30%, hitting an all-time high, as more people chose to use their cards rather than cash.
‘Real social problems’
Elliott also warned that booming property prices could create “real social and political problems” before too long.
Elliott said the Reserve Bank might have to step in and raise interest rates earlier than forecast. He said the Australian property market – which rose at its fastest rate in 17 years last month – could keep growing rapidly if left to its own devices.
“Well, it can go on for quite a while because you’ve got to go back to what’s driving it – it’s the good old supply and demand,” Elliott said. He said the amount of average income needed to service a home loan “has never been lower.”
“And so that suggests that people have a lot of bandwidth to keep the demand high for housing,” Elliott said.
However, Elliott said the pace of growth in the market was starting to worry some observers.
“I think extreme moves either up or down are never probably very good if they’re sustained for a period of time,” he told 3AW. “So it’s starting to get into that area where people are starting to raise a few eyebrows, wondering if it’s a bit unhealthy at these levels.”
Elliott said that price growth shouldn’t “keep going at sort of double-digit rates for very long, because you start getting real social and political problems as a result. And nobody wants that.”
On Tuesday, RBA Governor Philip Lowe reiterated his belief that the central bank wouldn’t have cause to raise the 0.1% cash rate until “2024 at the earliest.” Lowe said that he was not concerned about asset price levels in the housing or equity markets, according to a report by The Australian.
Read more: Regulators could put the brakes on home lending as soon as this year – ANZ
But Elliott told 3AW that “unprecedented” government stimulus is driving up asset prices and will likely spill over to other sectors of the economy.
“I mean, they’ve sort of said that they’re not intending to [raise rates] for a couple of years, but things change,” Elliott said. “We have inflation in the economy – it’s just asset-price inflation. There’s a lot of money sloshing around, which was partly to do with COVID, partly to do with other things. All that money has to find a home, and people are pouring it into assets – and they’re pouring it into housing and also into equity.”
Elliott said it was likely that “at some point that’ll start leaking into real inflation in terms of consumer prices.”
