Nathan Zaia

Recent buyers of homes are at the greatest risk of negative equity, and the rising interest rate environment increases the likelihood that some homebuyers will default on their loans. With Australia’s large cohort of new homeowners, that could lead to losses for the big banks.

Analysts say Macquarie Group, which posted a $2.3 billion half-year profit and an 11 per cent increase in net operating income, can continue to grow its performance fees revenue and profits even if share and bond markets fall.

Following the Reserve Bank of Australia’s decision to increase the cash rate by 50 basis point in June and July, a slowdown in the property market has been accelerated. According to some experts, shares in the big banks are vulnerable to a slowing housing market. But others say the big banks are undervalued and could benefit from expanding interest rate margins in the months ahead.