Wealth of Ireland's richest households drops for first time in five years 

'The richest 10% of Irish households held more than five times the amount held by households in the bottom half of the net wealth distribution altogether,' the Central Bank said

According to the Central Bank’s latest quarterly Household Wealth report, most household wealth, 68.5%, is held up in housing. 

The wealthiest 10% of Irish households have seen their total net household wealth decline for the first time in five years during the start of the year, falling by €3.2bn, according to new data from the Central Bank of Ireland.

Its latest quarterly Household Wealth report shows the combined net wealth of Irish households reached just over €1.247tn as of the end of March this year, increasing by €6.3bn compared to the end of December to hit a record high for this Central Bank data series.

Much of this wealth, 68.5% or €854.8bn, is tied up in housing. 

In the three months to the end of March, the total value of housing assets owned by Irish households increased by €15.2bn. Most of this increase, €12.9bn, was positive re-valuations of existing housing assets. 

Other household investments increased by €16.7bn which was mainly driven by investment in life insurance and annuity entitlements.

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However, both these increases were offset by a fall in valuation of financial assets of €8.9bn over the quarter. As of the end of March, the value of households’ financial assets stood at €555.5bn which were mainly composed of currency and deposits, €211.6bn, and insurance and pension entitlements, €252.8bn.

Total household liabilities, mainly consisting of long-term loans, totalled €163.1bn. This amount remained unchanged from the end of the previous quarter. The value of household loans decreased by €500m over the quarter, totalling €157.1bn.

The data shows that the wealthiest 10% of households own €645.3bn worth of assets or 48.6% of total household net wealth in the country.

“For the first time in five years, the net wealth of the top decile decreased compared to the previous quarter, by €3.2bn, or 0.5%. This was largely driven by a decrease in the value of life insurance and annuity entitlements they held,” the Central Bank said.

The net wealth of households in the poorest half of the distribution rose by €2.6bn, or 2.2%, to stand at €117.8bn, or 8.9% of the national total. The increase was mainly due to housing assets’ growth.

The Central Bank said:
The richest 10% of Irish households held more than five times the amount held by households in the bottom half of the net wealth distribution altogether.

“However, since the beginning of the series in 2013, the proportion of wealth owned by the poorest half of households followed an upward trend, highlighting decreasing wealth inequality in Ireland.” 

Households in the “middle” part of the distribution owned €564.2bn overall, or 42.5% of total net wealth in the country at quarter-end.

Ireland’s Gini coefficient, a measurement of wealth inequality, stood at 64.6 as of the end of March, slightly down compared to the 65.0 recorded in December. In this measure, 0 represents a perfect equality while 100 represents full inequality where only one person has all the income.

Ireland’s Gini coefficient is below that of the overall eurozone, at 72.4, and most other European counties.

“Moreover, since the beginning of the series, the Gini coefficient for Ireland decreased significantly, by 12.7 points, indicating a notable reduction in the level of wealth inequality in the country,” the Central Bank said.