Residential price appreciation in Australia and New Zealand "remains a key risk to bank ratings," ratings agency Standard & Poor's said yesterday in a wide assessment of factors in property markets in Asia Pacific.S&P said, banks "are reasonably placed to absorb price shocks… Banks in Australia would be able to withstand a drop in residential property prices and disposable income of up to 20 per cent and 2.5 per cent respectively, based on current capital levels."However, it said "we believe that these scenarios would make bank credit profiles vulnerable to any further weakening in the operating environment or bank-specific credit factors. "By contrast, we expect that a 30 per cent drop in property prices and a five per cent decline in disposable income could have a significant negative impact on the Australian banking system."