Redraws funded consumer spending

A Reserve Bank study found that at least 2.5 per cent of Australia's consumer spending in 2004 was financed by households withdrawing a net $17 billion of equity in their homes. The study found that almost 60 per cent of the money withdrawn in housing equity was invested in other assets, such as property, equities, bank deposits or the owner's business. But 18 per cent was used to fund consumption, including house redecoration or buying a car. Twelve per cent of households withdrew equity in 2004 while 30 per cent increased equity. The others either owned their homes or were renting.