RBA Financial Stability Review states households and businesses are well placed to weather slower economy and falling house prices

Findings of resilient household balance sheets and low negative equity, even under a further sharp housing drawdown, remove a constraint rather than add one: a central bank that judges the financial system able to absorb falling house prices retains more room to hold or tighten policy than one worried about mortgage distress, and past cycles have shown housing weakness alone rarely dictates the rate path unless it feeds arrears. The distinction worth drawing is between balance-sheet resilience, which the review stresses, and cash-flow pressure, where the shortfall share and cost pass-through language are the softer spots. The framing that major risks originate abroad echoes prior editions and directs attention to external funding conditions and China-linked channels rather than domestic credit. AUD and front-end rates have tended to take such reviews as mildly supportive of the prevailing policy stance, with the follow-ons being the next Board minutes, arrears data and any shift in tone from officials on housing.