The Financial Stability Review showed banks’ share-to-price book ratios have recovered from March but they are still below pre-pandemic levels “reflecting a decline in the earnings outlook and a reduction in investors’ risk appetite”.
According to stress test simulations in the report showed banks have sensitivity to falls in GDP, property prices and unemployment.
Despite this uncertainty, housing finance grew 12.6 per cent in August off the back of government stimulus packages.
However, there were still risks associated with commercial real estate with conditions deteriorating in retail and the once tight office sector according to the RBA.
The Financial Stability Review showed banks’ share-to-price book ratios have recovered from March but they are still below pre-pandemic leve