Housing and stock falls curb wealth growth to 5pc in 2007
With 33,000 millionaires, Ireland second only to Japan per head
At the launch of its annual research report on the level of wealth in Ireland 'Wealth of the Nation' were Pat O'Sullivan, senior economist, Bank of Ireland Private Banking, and Mark Cunningham, managing director Bank of Ireland Private Banking.
Tuesday July 31 2007
THE current weakness in the housing and equities markets should see net wealth growth slow to about a quarter of the 19pc rate seen last year, Bank of Ireland Private Banking executives said yesterday.
At the launch of second annual 'Wealth of the Nation Report', the bank said the country's net wealth - including property, deposits, pensions and investments - jumped €126bn to €804bn in 2006.
The average net wealth per head of population in Ireland rose to €196,000 last year from €168,000 in 2005, ensuring the Republic remained second only to Japan in a league of leading OECD countries.
The bank estimates the number of millionaires in Ireland rose 10pc last year to 33,000. This figure excludes residential property. Some 330 individuals are valued in excess of €30m.
"We estimate that the top 1pc of the population holds 20pc of the wealth, the top 2pc holds 30pc and the top 5pc holds 40pc," the report said.
In all, net wealth in the Irish economy, which excludes borrowings, has soared over 400pc since 1995.
The rate of increase seen last year has prompted report's author, Pat O'Sullivan, a senior economist at the bank, to increase his 2010 forecast to €928bn from €864bn. "This is predicated on a soft landing for the housing market within Ireland," said O'Sullivan.
His projection for 2015 remains broadly unchanged at €1.16 trillion.
While the report does not give any near-term forecasts, O'Sullivan told a press conference, on questioning, that the rate of growth for 2007 would "probably be in the mid-single-digit" region. This points to a figure of close to 5pc.
Ireland's gross worth came to €965bn last year, including €161bn of debt.
Residential property remained, by far, the biggest component of the household balance sheet, rising 20pc in value to €671bn - driven by 11pc house price inflation and the building of some 93,000 new homes.
Property accounted for 72pc of overall assets last year, while equities made up 15pc, bonds 3pc and cash 10pc.
The bank predicts that property will only account for 61pc by 2015. It sees equities rising to 22pc, bonds to 5pc and cash to 12pc.
"Other assets will outperform residential property over the next few years," said Mark Cunningham, managing director of Bank of Ireland Private Banking.
"Most western markets to us look like reasonably good value. We are still very much in a low interest rate environment, the US economy and earnings are holding up and valuations look good."
- Joe Brennan
