Property Bubble Bets Help Spur Surge in Aussie Bank Bond Risk
- Credit default swaps on Big Four banks rise by most since 2011
- Sydney house prices dropped in final quarter of 2015
Houses stand in Sydney, Australia, on Wednesday, Feb. 17, 2016. Australia's opposition Labor Party is proposing scaling back tax breaks for landlords that have helped fuel a 50 percent increase in property prices in capital cities since 2008.
Photographer: Brendon Thorne/BloombergThe cost of insuring the debt of Australia’s largest banks surged by the most in four years after a report by research firm Variant Perception fueled speculation about risks in the nation’s housing market.
The average cost of credit default swaps for the four biggest Australian lenders surged by 18.6 basis points on Thursday, the largest one-day increase since Nov. 1, 2011, based on CMA prices. The contracts reached 142 basis points, the highest level since October 2012, when the European debt crisis was at the forefront of investors’ concerns.