A health check has been carried out on Australian banks by ratings agency Fitch.
A prominent US economist recently described Australian house prices as the world's 'last bubble'.
Radio New Zealand's Sydney correspondent reports that led to concerns among some overseas investors about how Australian banks might withstand a possible correction in residential property.
Fitch found that even in what it calls the most severe scenario - a 40% decline in house prices - total losses by the banks would peak at about $A9 billion.
It's estimated the banks can absorb losses of three to four times that amount.
As to what might trigger a correction, Fitch identified a rise in unemployment and a downturn in China.