The Australian sharemarket and S&P/ASX 200 (^AXJO) has spent its first day of 2019 falling 75 points, with the likes of Australia and New Zealand Banking Group (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA) being knocked down.
As the ASX 200 closed today, shares in ANZ and CBA were down 2.4% and 2%, respectively. National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) were down 1.8% and 2.2%.
Why Are CBA and ANZ Shares Falling?
As is often the case, there appears to be little to help explain the sell-off of bank shares on the ASX. The only newsworthy update came earlier today.
Rask Media’s Jaz Harrison reported that the decline in house prices throughout 2018 extended into December, with Sydney and Melbourne house prices coming under pressure. Fairfax Media is calling it the weakest property market since 2008… that’s debatable.
Nonetheless, as you would expect, news of falling house prices is bad PR for bank shares, with the implication for investors being that fewer Aussies will be prepared to buy houses and, therefore, the demand for their home loans will fall.
And as we know from this excellent article on bank shares, How I Analyse A Bank Share, Australia’s largest banks make the majority of their money from lending to residential homeowners and investors.
On a deeper level, for some time investors have been concerned about the property market. Regulatory reform, the Royal Commission and rising interest rates as issues the banks must contend with.
Further, weakness in China and political uncertainty are bubbling away in the background. However, those things are omnipresent. Meaning, uncertainty is part-and-parcel with investing. So too is experiencing daily share price rises and declines of +-3%.
What Now?
All-in-all, it seems to be just another day for the local sharemarket.
If you’re looking for a better way to start 2019, you can read the free investing report below and get the names of 3 of our favourite ASX dividend + growth shares for the long run.
[ls_content_block id=”14945″ para=”paragraphs”]
