Irish households are reaching record levels of wealth due to the impact of the coronavirus with the average net worth per person now standing at more than €166,000.
As the Irish Examiner reports, stable house prices, a large rise in deposits and a fall in debt has led to a record household net worth of €817bn in the second quarter of this year according to new figures from the Central Bank.
The figures show that financial assets rose by €21.6bn, primarily due to increasing investment in deposits and a rise in the value of insurance and pension schemes.
Housing assets remained relatively stable over the quarter at €542bn while household liabilities fell over the quarter, by €1.4bn to stand at €143bn.
However, the Central Bank recognises that the figures are skewed depending on personal circumstances and said the figures may not reflect the underlying experiences of individual households or describe the distribution of wealth.
Households have seen high unemployment, at 5.2 per cent in June with overall pay falling by €2.1bn.
However, at the same time households have also seen a €4.4bn rise in social transfers and subsidies through the PUP payment and the wage support scheme. Covid-19 restrictions also mean there has been a major fall in consumption, down €5.8bn in the second quarter.
PUP payment
The Central Bank said these counteracting movements lessen the impact of unemployment and the fall in pay experienced by household net worth.
In early 2007 at the height of the Celtic Tiger boom, household net worth had reached €723bn before falling to a low €432bn in 2012.
The Central Bank said household debt fell by €1.1bn in the second quarter to stand at €131bn.
This equates to €26,295 per capita. Household debt has decreased by 36 per cent or €72bn, since its peak of €202bn in 2008.
Household savings increased by €1.8bn to stand at €5.9bn as the effects of Covid-19 limited the spending opportunities.
While household debt has fallen significantly, borrowing by the State has reached record highs increasing by €14.3bn in the second quarter to stand at €252bn. The extra borrowing is required to support the various pandemic-related support measures.
