Irish household debt fell by 1.1 per cent in the fourth quarter of last year as borrowers focused on repaying loans.

The latest figures from the Central Bank show household debt continued to decrease, falling by €1.6bn, or 1.1 per cent, to €149.6bn.

This represented a household debt per capita of €32,269. Household debt is now at its lowest level since the first quarter of 2006.

The Central Bank said the decline over the quarter reflected net debt repayments (-€1.1bn) and debt write-downs (-€0.6bn), which were slightly offset by positive reclassifications (€0.1bn).

Household net worth increased by 1.4 per cent to €626.1bn, or €135,078 per capita, during the same period. This increase was largely driven by a rise in housing asset values (€6.3bn), as well as a further decline in household liabilities (€1.6bn).

Compared to a post-crisis low of €444.0bn in the second quarter of 2012, household net worth has risen by 41 per cent. However, it is still 12.8 per cent lower than its pre-crisis peak of €718bn in the second quarter of 2007.

Household debt has declined continuously for the last 29 quarters and has fallen by 26.6 per cent since its peak of €203.7bn in the third quarter of 2008.

Indicators of household debt sustainability continued to improve during the same period. Debt as a proportion of disposable income fell from 159.8 per cent to 155.1 per cent, reflecting both the decline in household debt, as well as strong growth in annualised disposable income.

Overall, the ratio of household debt to disposable income has fallen by 60.2 per cent since its peak of 215.3 per cent in the second quarter of 2011.

Debt as a proportion of total assets also decreased, falling to from 19.5 per cent to 19.1 per cent over the quarter.

Despite a "significant decline" in debt as a proportion of disposable income over the year to Q4, Irish households continued to be the third most indebted in the European Union. Irish household debt fell by 25.1 per points over the year.

The Central Bank noted this was “significantly more” than any other country examined.

Spanish and Portuguese household debt also fell considerably over the year declining by 6.1 per cent and 4.6 per cent respectively.

Household investment in financial assets rose to €1.9bn. This represented the highest level of investment in financial assets by households since the third quarter of 2009.

The increase in financial assets over the quarter largely reflected transactions into deposits.