Jun 08, 2022 11:15PM ET
Shares in Australia's big four banks fell further on Thursday to a multi-month low as the central bank's biggest interest rate rise in 22 years earlier this week sparked fears of a sell-off in the property market.
Those fears have begun to intensify after property prices interrupted a 20-month rally in May as interest rates and the cost of living rose.
At the local level, the Reserve Bank of Australia (RBA) has been pressuring banks over excessive interest rate rises and the possibility that this will put too much pressure on the housing market and their profitability.
Commonwealth Bank of Australia, National Australia Bank, Westpac, and Australia and New Zealand Banking Group fell 2.6% to 3.7%, taking the benchmark index to a three-week low.
The RBA raised interest rates by 50 basis points on Tuesday to counter rising inflation.
Investors expect interest rates to rise to almost 3% by the end of 2022, one of the most aggressive tightening campaigns so far.
The country's big lenders have followed suit, raising their variable interest rates on home loans by 50 basis points a year.
The rise in interest rates also appears to have made bonds more attractive to investors, with the Australian 10-year bond yield at its highest in almost eight years.