Fitch: Housing slump is the main threat to Australia's credit-market stability”

The US-based credit ratings agency, Fitch ratings, published its latest survey of fixed-income investors, revealing that housing sector slump in Australia is a greater credit risk than that posed by China slowdown fears.

Key Quotes:

“A domestic housing-market downturn has replaced the prospect of a China hard landing as the main threat to Australia's credit-market stability”

“Investors also identified property market exposure as the greatest risk to bank credit quality over the next 12 months, and financials as the asset class facing the greatest refinancing challenge

“Only 4% of the investors surveyed believe house prices will fall more than 10% by mid-2019, with confidence underpinned by their stable views for unemployment and interest rates”

“Views of managers of more than AUD300bn of fixed-income assets, accounting for over three-quarters of the Australian domestic real-money market“  

“Survey was undertaken in partnership with KangaNews - a specialist publishing house that provides commentary on fixed-income markets in Australia and New Zealand”