THE stagnant property market has taken a toll on a favourite Australian pastime: converting bricks and mortar into cash.
The boom in equity withdrawn from housing and used to boost superannuation, bolster share portfolios and buy cars, overseas holidays and plasma televisions has petered out, a report by the Reserve Bank says.
Robert Mellor, of BIS Shrapnel, said Sydney house prices might fall a further 5 per cent this financial year because of higher interest rates, pushing more households into negative equity. However, the strength of the labour market was helping to prevent a surge in forced sales, he said.
Home owners find equity a spent force