Net worth of Irish households reaches record high

Net worth of Irish households reaches record high

The total net worth of Irish households has reached a new record, while debt levels have plummeted to a 14-year low.

The Central Bank’s latest quarterly financial accounts show the net worth of Irish people rose to €772bn, which equates to €158,986 per person, or roughly €444,000.

Household net worth is the value of total assets, such as savings and investments, minus the total value of outstanding liabilities

According to the Central Bank, the increase in net worth was primarily due to the rising value of financial assets and increased investment in financial assets by households.

Investment rose to €2.3bn, driven by investment in currency and deposits of €1.4bn, and in insurance and pension entitlements of €800m.

Household debt fell by €600m to €136.9bn, or €28,186 per person – its lowest level since 2005.

This was due to improved valuations of assets and rising investment by households.

The value of households’ housing assets fell by €2bn, reflecting the second quarter in a row of declining house prices.

Household liabilities remained mostly unchanged during the second quarter, as the pace of active de-leveraging by households eased.

Household debt continued to fall during the first quarter of the year, dropping by €600m.

At the end of March, debt stood at €136.9bn, or €28,186 per capita.

Household debt is at its lowest level since 2005. Since its peak of €202.9bn in 2008, it has decreased by 32.5%, or €66bn.

Household debt as a proportion of disposable income fell by 2.9 percentage points to stand at 119.8%.

The decline over the quarter was driven by an increase of 2.2% in annualised disposable income, in addition to the decrease in debt.

Government debt increased by €9.6bn during the first three months of the year to stand at €234.6bn.

This was largely due to net debt issuance of €9bn during the quarter.

The increase in debt was partially offset by a corresponding rise in government holdings of currency and deposits, which increased by €8.1bn euro.

As a result, government net financial worth decreased by €800m during the quarter.

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