The big four banks have opened lower after Moody’s has downgraded their credit ratings. The credit rating agency associated the move to high house prices in the core Sydney and Melbourne markets.

Shares in Commonwealth Bank, ANZ, National Australia Bank and Westpac have dropped, with Westpac suffering the worst fall with a 1.1 per cent decline by 1020 AEST. The other major banks were down by between 0.5 and 0.9 per cent.

The banks were stripped of their Aa2 long-term rating. Moody’s put them on the next level down at Aa3, while their short term ratings remain the same.