The Banking Sector thrives on a strong property market as they enjoy steady margins with low bad debts, we believe todays ideal environment can be maintained for the coming year, or two minimum. However the current strong tailwind is clearly built into todays prices at least to a certain degree with the likes of CBA doubling in under 2-years, posting fresh all-time highs in the process.
Our outlook for CBA is very similar to the underlying property market i.e. we remain bullish but the best of the gains are behind us and further appreciation feels likely to be at a reduced speed although healthy fully franked dividends should cushion the impact for shareholders.
MM remains bullish the banks with NAB & CBA our picks
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