Household debt at its lowest level since 2005
Household debt has fallen to its lowest level since 2005.
The net worth of households in Ireland slumped 40pc during the financial crisis. However, it has since increased by 70pc to a new high of €732bn, according to the third quarter 'Irish Economic Monitor' from specialist bank Investec.
Household net worth is now 2pc above the Celtic Tiger high. Meanwhile, sales of loans are struggling to provide meaningful short-term growth for banks.
Speaking to the Irish Independent, Philip O'Sullivan, an economist with Investec, said that since the financial crash, banks have struggled to grow their loan books as large numbers of houses and businesses engage in the aggressive pay-back of debt.
"At its peak in 2006, bank lending was €39bn, however lending is now down to €9bn. House prices, while it looks like they are going up and up, are still about 20pc lower than their peak," Mr O'Sullivan said.
Between 30,000 and 50,000 houses need to be built each year in order to meet the demand being created in the country, the report states.
Housing output is currently well below this, with just over 14,400 dwellings completed last year.
Mr O'Sullivan added that once output gets to 40,000 per annum, banks will be able to build up their loan books.
The report also finds the level of savings among households remains high, which Mr O'Sullivan expects will continue due to the Central Bank rules around minimum deposit sizes for mortgages.
Meanwhile, just over one in two jobs created by multinational corporations (MNCs) in Ireland last year were located in Dublin.
This comes as the country reaches record employment, with some 2.3 million people now working in Ireland, and unemployment is at a 10-year low.
The next beneficiary was Cork, which attracted 12pc of the new jobs created by MNCs, while 7pc of the new roles were created in Galway.
Overall, last year proved to be a record year for job creation by IDA Ireland-supported MNCs in Ireland. The number of gross jobs created reached a record high of 19,851, which works out at 1pc of total employment.
"With global growth set to improve to a seven-year high in 2018, we're optimistic of the prospects for this year," Mr O'Sullivan, said.
"In this regard, the 3pc growth in job creation flagged in IDA Ireland's first-half results for 2018, while welcome, did not come as a surprise."
However, the increasing job creation, coupled with an inadequate supply of housing, has resulted in rapid increases in both the price of houses and rents in recent years.
"Labour market conditions in Ireland continue to tighten," Mr O'Sullivan said. "These dynamics have pushed nominal wages to an all-time high. The economic strengthening is supporting demand for housing."