Thursday, September 04 12:04:31
The net worth of Ireland's households rose by 0.9pc during the first three months of this year while household debt fell by nearly E2bn, latest Central Bank figures show.
Household net worth rose for the seventh straight quarter. At the end of the period, net worth stood at E508.5bn or E110,312 per capita.
Overall, net worth has risen by 13.7pc since Q2 2012. Increases in household financial assets (+E4.5bn) and the continued reduction in household liabilities (-E1.9bn) contributed towards the rise in net worth during Q1.
The former partly reflected increases in the value of 'insurance technical reserves' and 'shares and other equity'. The rise in net worth over the quarter was partly mitigated, however, by a decline in housing assets of E2.1bn. The latter reflected the decrease in national house prices during the first quarter of the year.
Household debt fell by E1.9bn during Q1 2014, representing a quarterly decline of 1.2pc. By end-Q1 debt stood at E164.3bn or E35,694 per capita. Overall household debt has decreased by 19.3pc since Q3 2008.
Indicators of household debt sustainability also continued to improve during the period.
Debt as a proportion of disposable income declined by 3 percentage points, falling to 184.5pc. The decline largely reflected the reduction in household debt and, to a lesser extent, a slight increase in disposable income of E185m. This measure of household debt sustainability was at its lowest level since Q4 2006 but continues to remain high by international standards. Household debt to total assets fell by just 0.4 percentage points to 24.4pc. The decline was driven by the decrease in debt and an increase in the value of total household assets.
Household investment in financial assets fell slightly further during Q1 2014, totalling just E240 million. This represented the lowest level of investment in financial assets since Q3 2011. Investment in 'currency and deposits' totalled just E135m over the quarter. This represented a decline of E140m compared to the previous quarter. Meanwhile, investment in 'shares and other equity' and 'insurance technical reserves' remained largely unchanged.
Household net lending remained largely unchanged during Q1 at E1.7bn. Chart 3.5 shows that the decline in household investment in financial assets over the quarter was fully set off by increased repayments of liabilities by households. The latter stood at E1.5bn during Q1.
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