In contrast to the Government’s ballooning balance sheet, homeowners have been working hard to pay down debts they owe, reducing liabilities such as mortgages and credit card debt.
The figures were released by the Central Bank in its quarterly financial accounts for the fourth quarter of 2011.
The bank reported that their figures recorded the first increase in disposable household income since the last quarter of 2008.
Bloxham economist Alan McQuaid said the increase in disposable income was a technical increase based on the lower debt levels in households.
“Households are still under serious pressure and in difficulty. They are very cautious when it comes to spending. This has been reflected in the retail sales figures. What they are saying here is that households have lower debt,” he said.
Mr McQuaid said there won’t be any real recovery in disposable income until the labour market stabilises and people return to work.
The decline in the value of people’s homes continued to impact householders’ net worth. The figures showed the fall in value from peak net worth of households in 2007 to today’s value was almost 40%. The net worth of households now stands at €457bn, or €101,962 per person.
This figure still outstrips the amount of money households owe. Average household liability stands at €41,169 per capita or, as a group, households now owe €184.5bn.
Businesses not involved in banking, the non-financial corporate sector, also saw their accumulative wealth decline. Corporations in Ireland saw their wealth fall 5% to €207bn in the last quarter of 2011 as their financial liabilities outstripped an increase assets value.
Government liability hit its highest level ever in the last quarter of 2011, climbing 2% in the second half of the year to €173.3bn.
The national debt stands at €129.6bn.