Households’ disposable income up €480m in Q2

The gross disposable income of Irish households grew by €480m — or 2.2% — to €22.4bn in the second quarter of the year.

This year-on-year figure, published yesterday by the CSO, was driven by an annualised €473m increase in profits earned by self-employed homeowners and a fall of €181m in income payments.

The figures show that household expenditure fell by €206m from the start of April to the end of June, when compared to the same period last year — declining from €18.92bn to just under €18.72bn.

“Taking this decline together with the increase in gross household disposable income, gross household savings increased from €3.65bn in the second quarter of 2011 to €4.34bn in the second quarter of 2012,” the CSO said.

“The derived gross savings ratio — which expresses savings as a percentage of gross disposable income — increased from 16.2% in the second quarter of 2011 to 18.8% in the second quarter of this year.”

While the data painted an improved picture of household affordability — albeit measuring the first half of the year — the latest quarterly EBS/DKM Affordability Index, taking in the third quarter and mainly looking at the mortgage and housing markets, said further challenges lie ahead for disposable income levels.

“It is expected that further austerity measures will impact the disposable income of Irish households, while homeowners are also preparing for the introduction of a property tax,” said the EBS head of mortgages, Owen Purcell.