The Reserve Bank of Australia said on Thursday that the net value of most Australian mortgage holders will remain positive even under the worst circumstances where housing prices plummet by 20% and the unemployment rate soared to more than 6%. The Reserve Bank of Australia estimates in its Financial Stability Assessment Report that most households and businesses with loans have sufficient cash reserves to cope with the economic slowdown and falling housing prices. The Reserve Bank of Australia said that given banks' sufficient capital levels, steady profitability, and sound lending standards, the banking industry is still capable of withstanding shocks even if the real estate market deteriorates “significantly”.

The Reserve Bank of Australia said on Thursday that the net value of most Australian mortgage holders will remain positive even under the worst circumstances where housing prices plummet by 20% and the unemployment rate soared to more than 6%. The Reserve Bank of Australia estimates in its Financial Stability Assessment Report that most households and businesses with loans have sufficient cash reserves to cope with the economic slowdown and falling housing prices. The Reserve Bank of Australia said that given banks' sufficient capital levels, steady profitability, and sound lending standards, the banking industry is still capable of withstanding shocks even if the real estate market deteriorates “significantly”.