Homeowners are €300,000 better off than renters, official data shows

The wealthiest 10pc had net household wealth of at least €788,000 while the bottom 10pc had less than €600

The poorest families have a net wealth of just €600. Photograph: Andy Buchanan

The poorest families have a net wealth of just €600. Photograph: Andy Buchanan

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The poorest families have a net wealth of just €600. Photograph: Andy Buchanan

Jon Ihle

May 19 2022 07:33 PM

The net wealth of homeowners far outstrips rented households, with renters barely in positive territory, according to new data collected by the Central Statistics Office in its latest Household Finance and Consumption Survey.

The median net wealth of households that own their own home reached nearly €304,000 in 2020, the most recent year for which figures are available.

By contrast, the median rented household had just €5,300 when the value of debt was subtracted from the value of assets.

The huge gap between the two cohorts has major implications for housing, pension and healthcare policy and how the Government will provide for those who have minimal assets in old age.

The wealth difference is likely to have widened even further in the last two years as the savings rate reached record levels and house prices continued to rise at double-digit rates per annum, adding tens of thousands to the value of homeowners’ assets.

Even when the value of housing – typically a household’s most valuable asset – is stripped out, the disparity remains wide.

The median house value in Ireland at the time of the CSO survey was €260,000, meaning homeowners still had about eight times more non-housing wealth than their counterparts who were renting.

Nearly seven in 10 Irish households own their main residence, however, meaning a large proportion of the population has a wealth anchor.

For those homeowners with a mortgage, the median loan-to-value ratio was a little more than 45pc, while just 4pc were in negative equity with a mortgage bigger than the value of their house.

All but 3pc of households own some form of financial asset such as savings, shares, bonds, investments or pensions. For households that own financial assets, the median value is €13,300.

Most also have debt, with 68pc have either a mortgage, personal loan, overdraft or credit card balance. The median value of Irish household debt stood at €25,000.

The net wealth gap evident between homeowners and renters is even more pronounced when looking at the overall richest and poorest groups.

The wealthiest 10pc had net household wealth of at least €788,000 while the bottom 10pc had less than €600.

The CSO said the wealth gap in the survey was likely to have been underestimated, as few households in the top 1pc were included, with none with more than €40m in assets, meaning a significant portion of the wealth in the top decile was not captured.

The wealthiest households were those with two adults, at least one of which was over 65, indicating that pensioners tend to have greater net wealth than other demographics, having accumulated retirement savings and paid down their mortgages.

This group had a median net wealth of nearly €362,000. Nearly two-thirds of households with someone over 65 had higher net wealth than the national median.

By contrast single adult households were children under 18 had the lowest median net wealth of only €4,000.