From Moody’s:
Data released by CoreLogic last week show that activity in the Australian housing market – after moderating in late 2015 and early 2016 – is showing signs of re-acceleration, led by strong price growth in Sydney during April and May. At the same time, household debt/ income ratios continue to rise. These trends are unfolding against a back drop of an already-high level of household indebtedness and elevated overall leverage in the economy, and are credit negative for Australian banks – particularly in the context of their very high ratings. Whilst current stable employment conditions and low interest rates support the quality of bank housing portfolios, high housing prices and consumer leverage do raise the sensitivity of the banks to downside risk in the housing market.
House prices have picked up again …
