I think the fact our housing bubble hasn't popped yet goes a long way to explaining why our banks look to be in such great shape. I'm not sure all the patting ourselves on the back is necessarily warranted.
For example, the leverage of the Commonwealth Bank of Australia is about 19:1, where most of their assets are residential mortgages :
"... I think the fact our housing bubble hasn't popped yet goes a long way to explaining why our banks look to be in such great shape. I'm not sure all the patting ourselves on the back is necessarily warranted. ..."
Yes, the Australian economy depends heavily on China's at the moment. If China proves unable to maintain its current growth rate, Australia is likely to suffer a pretty severe downturn.
I walked 240km (Canberra to Kosciuszko) earlier this year on a bet made on the housing bubble ~ http://www.flickr.com/photos/bootload/collections/7215762379... and the most interesting thing I learned was how broken economic models really are.