Infographic: Storm clouds for Australia's banks

A heavy reliance on mortgages and deteriorating employment conditions threaten to undermine the financial performance of Australia's bank stocks.

Australia’s ceaseless love affair with the housing market poses latent risks to investors in bank stocks as banks have become increasingly sensitive to economic deterioration and external shocks.

More than 63% of bank loan portfolios are extended to residential mortgages and the availability of cheap credit has driven house prices sharply higher in key cities like Sydney and Melbourne.

In just 20 years, average house prices have increased fivefold rising to A$1,190,000 in Sydney and A$943,100 in Melbourne.

House prices now stand at 14 times the average annual salary compared to 7.6 times in the UK and 5.4 times in the US.

...
¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222