PHOTO: Gold Coast, Australia

House prices are causing a lot of people sleepless nights. The pace of price falls just won’t stop accelerating. Where will the impact hit? Some commentators keep looking nervously at the banks, which have huge property exposures.

In my view, the people who say our banks will collapse are assuming we are similar to the US. I see big differences. Mortgage arrears are low and our banks are well capitalised. But a sharp house price downturn can still cause a wave of bankruptcies and people losing their life savings.