House prices could fall more than 30 per cent as the country plunges into a “deep recession” in a doomsday scenario outlined by property experts.
House prices could fall more than 30 per cent as the country plunges into a “deep recession” if disgruntled borrowers launch class actions against the major banks for breaching responsible lending laws, new analysis suggests.
The worst-case scenario is one of five outlined by UBS analyst Jonathan Mott in a client note this week, “Catching a falling knife”, in which he warned the outlook for the banking sector had “not been as challenged since at least 2008”.
“The recently completed bank reporting season suggests the outlook for the banks remains challenging,” Mr Mott said. “However, we believe the rapidly deteriorating housing market is a signal of even tougher times ahead.”
The total 2017-18 cash profit for the big four banks was down 6.5 per cent to $29.5 billion, while lending grew at a sluggish 3.1 per cent.