RBA Finds Households and Businesses Resilient Amid Economic Pressures

The Reserve Bank of Australia (RBA) has released its October 2026 Financial Stability Review, highlighting that households and businesses are well-equipped to handle challenging economic conditions.

According to the review, most borrowers would still have equity buffers in their properties even if house prices decline by a further 20%, due to prudent lending standards and the preceding run-up in prices. The RBA also noted that arrears remain historically low, despite a recent pick-up.

The central bank stated that ongoing geopolitical pressures have weighed on the profitability of some businesses, but most firms appear well-placed to manage cost pressures, thanks to strong balance sheets and cash buffers. However, smaller businesses and those in more energy-intensive or cyclical industries are more vulnerable to cost pressures.