Moody’s Investors Service has warned today, the recent resurgence in house price growth following last month’s rate cut would been seen as a credit negative for Australian banks.
The surge, “against a back drop of an already-high level of household indebtedness” would increase the sensitivity of Australian banks to a housing downturn.
The report stated, “And although we expect such an adjustment to be gradual, the likelihood of an outright downward correction in prices is rising.”
» Resurgence in housing prices and debt a greater risk for banks, Moody’s says – The ABC, 9th June 2016
» Moody’s rings alarm on housing – The Australian, 8th June 2016.
» Moody’s flags housing risk to Australian banks as investors surge – The Courier Mail, 8th June 2016.
» Moody’s: Australian banks face increased tail risks from rising house prices – The Star, 8th June 2016.