The latest NERI seminar took place on Wednesday 22 April 2015. Dr Reamonn Lydon, Central Bank of Ireland, presented research based on a novel dataset on households’ income, assets and debts in Ireland: the Household Finance and Consumption Survey (HFCS). The HFCS is an invaluable resource for policy makers, allowing for household-level analysis of the composition of wealth and debt, leverage and the debt-service burden.
Highlights included: the household main residence accounts for the majority of most households’ gross wealth (48 per cent on average); financial assets account for a much smaller proportion of gross wealth on average (13 per cent); more than half of households hold some form of debt, with mortgage indebtedness proving to be a particularly heavy burden for younger cohorts; however, the mortgage repayment burden is more evenly spread across the age distribution, with younger borrowers benefiting from low interest rates and long mortgage terms; the median value of net wealth is €105,000, in line with other Euro area countries (€109,000); the top 20 per cent of households hold 70 per cent of net assets – again, similar to the Euro area as whole; in Ireland, the concentration of wealth at the top end of the distribution is driven by two factors: larger holdings of real assets and relatively smaller holdings of debt.
The presentation and paper is based on an ongoing research project and an article in the February 2015 Central Bank Quarterly Bulletin Q1 2015 available here.
Lydon, Reamonn " The Financial Position of Irish Households ". Presentation given at the NERI Seminar Series, 22 April 2015