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Irish households see greater drop in wealth than other European countries
The Central Bank says that Irish households have lost a significant proportion of net worth in recent years due to the “substantial decline” in house prices.
THE CENTRAL BANK says that Irish households have lost a significant proportion of net worth compared with other European countries in recent years due to the “substantial decline” in house prices.
Between 2007 and the end of 2010, Irish households saw a net wealth drop of 23 per cent when measured as a proportion of disposable income.
The figures show that, by the end of 2010, the net wealth of Irish households stood slightly below the European average at 6.5 times their disposable income.
In the period studied, household property wealth in Ireland declined by 28 per cent, but the worth of Irish households’ financial assets rose by 5 per cent.
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A household’s net wealth within an economy is calculated by adding the value of property assets and financial assets and subtracting total debts.
After Ireland, Denmark was the country to experience the greatest fall in household wealth (-17 per cent), followed by Spain (-13 per cent). Denmark also saw a dip in household property wealth of 18 per cent.
In contrast, some countries saw an increase in net wealth, with Austria experiencing a surge of 7 per cent, and a rise in household property wealth of 8 per cent.
The central Bank’s latest Quarterly Bulletin revealed that Irish households have increased savings rates in recent years to reduce high debt levels – and that they have decreased their debt levels more than any other country since 2008. However, Irish households’ debts were still three times their disposable income at the end of 2010.
Meanwhile, Belgium was the country with the least indebted households, with average debts of 80 per cent of a household’s disposable income.
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Reality check – the economy is already at breaking point, as are a huge number of the citizens who live in this ‘wonderful’ society/economy or whatever it’s called.
Don’t know about anyone else, but I’m stretched to the limit already. More cuts will be the straw that breaks the camels back, will also be majorly counterproductive, what we need is some confidence in the economy so people will begin to spend again, don’t see that anytime so though!!!!
Well if this is coming from Austin Hughes I’d seek a second opinion. This so called economist appeared on a prime time debate with David McWilliams in 2003 using figures and forecasts to explain why the housing bubble was going to continue. McWilliams explained how the banks were in over their heads, guess who was right.
By 2003 it was already a bubble. A long period of very low ECB rates combined with ever more reckless lending by the banks just meant it had until 2007 to grow to gigantic proportions before it eventually burst.
Yet again I am going to say that you cannot tax your way out of a recession & no amount of austerity cuts, front loaded budgets or whatever the government wants to call it is goin to do this country any good. Or any of the other bailed out countries. The sooner the euro goes the better. We are barely able to pay the interest on the billions of loans. Debt forgiveness is the only answer.
I think people are so worried about what the future holds that, even if they are in the enviable position of having a bit of extra cash, they are tucking it away and are in no hurry to spend. I think every purchase is pondered over and there’s a lot less impulse buying. I’d imagine that this trend will be even more prevalent after the next budget which will cause an ever greater downward spiral.
“it may be more sage for the government to under-promise, and then over-deliver, on its targeted cuts for the December budget.” A lovely way to say the Government should LIE.
The government can’t see what is happening to the ordinary Joe soap ie me and you. There is No money for property tax, water rates, septic tank charges etc. WHERE are we to get it from? Take home is cut way back and will be hit again. Hospitals are at breaking point (I know!!). Schools can’t absorb any more cuts either. There are incidents of overcrowding in schools and I know of a class of 20 fourth years who have no one to teach them at one point during the day due to cutbacks.
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