This graph shows the share of banks' domestic credit as a share of total credit over the past couple of decades. Australian banks have substantially increased their exposure to housing over this period and housing credit now accounts for over 60 per cent of banks' loans. So the Australian banking system is potentially very exposed to a decline in credit quality of outstanding mortgages.
https://www.rba.gov.au/speeches/2018/sp-ag-2018-09-10.html  3/13  10/09/2018  The Evolution of Household Sector Risks | Speeches | RBA  Graph 3  The risk that difficulties in the residential real estate market translate into stability issues for the financial institutions, however, appears to be currently low. The Australian banks are well capitalised following a substantial strengthening of their capital positions over the past decade.