Surge in property prices pushes up net worth of households
The surge in property prices has pushed up the net worth of households and the debts of consumers here are falling faster than elsewhere in the European Union.
New figures from the Central Bank show that the average household in this country now has a net worth of €137,000.
It has risen because of the strong gains in property values and because people’s financial assets are now worth more.
Net worth is the value of assets minus debts.
The rise in net worth also reflects the fact that more people have escaped negative equity, while large numbers have now paid off their mortgage debt.
Over all households, net worth has risen by €7.2bn in the final quarter of last year.
It now stands at €654bn.
Rising house prices are a major reason for the rise, but a reduction in debt is also a factor.
The most recent figures show that property prices are increasing at a rate of 11pc a year, due to a chronic shortage of homes to buy at a time of strong demand.
Statisticians in the Central Bank said the net worth per head works out at €137,286.
The figures also show the debts of households are falling fast.
In cash terms, household debt is down 30pc from peak, to €144bn.
Government debt, by contrast, is not falling, and is still over €200bn.
The Central Bank said household debt in this country as a proportion of disposable income has fallen faster than in any other European Union country.
But despite this we are still the fourth most indebted in the EU.
Debts of household now represent 140pc of disposable income, down from 194pc in 2012.
The net worth of households has now shot up by 51pc since hitting a low-point during the economic crash in 2012. This is largely due to the recovery in the property market.
Household debts have fallen by the same percentage.