Irish households are, on paper at least, more than 75 per cent wealthier than they were at the low point of recession.
According to Central Bank’s latest quarterly financial accounts, the net worth of Irish households hit a record €757 billion in the second quarter of this year, eclipsing the boomtime pre-crash peak of €719 billion reached in the second quarter of 2007.
The figure, which is driven almost entirely by rising property values, was 76 per cent higher than the €430 billion recorded in the second quarter of 2012 when the State was mired in recession.
Household net worth is calculated by adding the total value of the housing stock and financial assets – such as cash savings, shares, pensions and possessions such as cars and antiques – and subtracting debt owed or liabilities.
However, it is considered a rather crude measure of prosperity as it hides the distribution of household assets and liabilities across income groups and age categories.
Irish households in the 35-44 age bracket remain highly indebted since the crash, whereas younger generations have lower debt levels relative to the rest of the euro zone.
Highly indebted
The Central Bank figures indicate that while debt levels here have fallen since the low point of the crash, Irish households remain highly indebted by European standards.
Overall, Irish households owed just more than €138 billion, which equates to €28,423 per person, the lowest level since 2005. As a proportion of disposable income, household debt was 128 per cent, which was the lowest level recorded since 2004 but still the fourth highest in the European Union. Since its peak of €204 billion in the third quarter of 2008, household debt has decreased by 32 per cent or €66 billion.
Mark Cassidy, director of economics and statistics at the Central Bank, said: "Today's figures continue a well-established trend, with household net worth reaching another new peak to stand at €757 billion in June 2018, largely driven by the increased value of households' housing assets."
“This new record in household net worth represents an increase of over 75 per cent since the lowest level recorded in June 2012.”
“While household debt has decreased in the quarter, Irish households remain the fourth most indebted in the EU. Such high levels of debt increase our vulnerability to economic shocks at a time when both domestic and external risks persist,” he said.
