Wesfarmers chief says property downturn big risk, but confident in policymaking

Coles owner Wesfarmers' chief Richard Goyder has said a downturn in the property market, chiefly Sydney and Melbourne, poses the biggest risk to the Australian economy but that policymakers were on top of it.

Goyder, who is due to retire in November, said the “thing to avoid is a house price bubble” but added that regulatory action would likely prevent that.

“Our housing market needs to be carefully managed and I think it is, between the Reserve Bank and the banks,” said Goyder, according to the Herald Sun.

“Just moderating what has happened with housing prices, particularly in Sydney and Melbourne, we certainly don’t want a bubble bursting there.”

Goyder, who took over as AFL chairman in April, spoke to Business Daily after Wesfarmers last month delivered a 22 per cent rise in full-year profit to $2.87 billion.

Recent CoreLogic data shows the property market is cooling, with Melbourne house price growth slowing to 0.5 per cent in ­August and Sydney prices flat.

Prices have risen by about 13 per cent in both capitals over the past year.

The monthly figures come after the banking regulator, the Australian Prudential Regulation Authority, asked banks to tighten their lending policies for housing mortgage.

Goyder will step down at the Wesfarmers annual meeting in November, handing over the leadership reins of the retail, mining and industrials conglomerate to the group’s former industrials head, Rob Scott. 

Under Goyder’s leadership Wesfarmers bought and transformed Coles into the nation’s best-performing supermarket chain and turned around Bunnings.