Household net worth in the country has officially surpassed €1 trillion for the first time as a boom in home values pushed the figure above the milestone level.
New data released yesterday by the central bank showed that a sharp rise in property revaluations coupled with growing cash savings pushed personal wealth to just over €1 trillion in the first quarter, up from €995 billion at the end of 2021.
The largest part of this – €649 billion – was attributable to residential real estate assets, which amounted to €630 billion at the beginning of the year.
The total home ownership value is now well above the previous record high of €604 billion set in 2007 in the final days of the Celtic Tiger real estate boom.
The increase in net worth in the first three months of the year was driven by a combination of growth in financial assets (€3.5 billion) and residential assets (€19.6 billion), according to the central bank.
These were offset by an increase in borrowings of €3.5 billion, resulting in a lower increase in net assets compared to the overall the previous quarter.
Nonetheless, revaluations of household financial assets and investments in financial assets have made an important contribution to the increase in net worth over the last year.
Since the first quarter of 2021, the financial assets of private households have grown by EUR 32 billion to an all-time high of EUR 532 billion at the end of March.
Also a big part of the story is the ongoing decline in household debt, which has more than halved as a percentage of disposable income since the eve of the financial crisis.
Irish households, once among the most indebted households in the world, are now around the eurozone average in terms of debt levels.
Record cash savings during the pandemic only increased net worth as debt became a smaller part of household balance sheets.
However, the central bank pointed out that its data says nothing about wealth distribution and does not capture households’ experiences at the individual level – a nod to the challenging circumstances for many low-income people, who face much higher energy, food and housing costs are confronted .
While the pandemic has boosted the savings of many professionals who have been able to work from home over the past two years, workers in hard-hit sectors such as hospitality have suffered job cuts and lost income.
https://www.independent.ie/business/irish/irish-households-in-the-money-as-net-wealth-crosses-1trn-threshold-41888510.html Irish households in the money as net worth surpasses €1 trillion mark