Richest 10% of Irish households have almost half of all wealth

The wealthiest 10 per cent of Irish households own almost as much wealth as all other households in the country combined, according to new data.

Distributional Wealth Accounts (DWA) published for the first time by the Central Bank of Ireland examine the growth of household wealth in Ireland every quarter between 2013 and 2023.

The total net wealth of Irish households has more than doubled throughout the last decade, to stand shy of €1.079 trillion in the second quarter of 2023. Net wealth is defined as assets minus liabilities such as mortgage debt etc.

This significantly outpaces the growth of household wealth across the euro area, which increased by 54 per cent over the same period to a total of €21 billion.

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The data show the wealthiest 10 per cent of Irish households are more than five times as rich as those in the poorer half of the distribution, and they hold almost half of total net wealth in the country (€518 billion).

The central bank noted that housing is the most important wealth asset for Irish households, accounting for 74 per cent of total assets for those in the bottom five and middle four deciles, and 44 per cent of wealth for those in the top decile.

The data highlighted that the overall value of housing assets held by households has more than doubled over the past decade, to €727 billion in quarter two of 2023, but that housing wealth is “unevenly distributed”.

The richest 10 per cent of Irish households own one-third of total housing asset wealth, while households in the bottom half own 14 per cent. The remaining and largest share of housing wealth belongs to households in the middle wealth bracket, accounting for 53 per cent of the total.

The central bank noted an “extreme concentration” of wealth among homeowners, as 97 per cent of total household wealth is held by those who own property — with the remaining 3 per cent of household wealth held by renters or those with free use of a home.

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The data does show there has been a “significant reduction” in wealth inequality over the past decade, mainly driven by strong growth in the net wealth of the bottom half of households.

Their share of wealth has increased from 2 per cent to 9 per cent, while the share of wealth held by the top 10 per cent of households has reduced from 58 per cent to 48 per cent.

Total net wealth for the lower half of households has increased almost tenfold, from €10 billion in quarter two of 2013 to €98 billion in the second quarter of 2023. Over the same period, wealth for households in the top decile has less than doubled.

Positive changes for wealth in lower-income households have been driven by a reduction in debts, while growth for the richest 10 per cent of households has been driven by increases in the value of assets, especially housing.

DWA accounts for Ireland are calculated by combining quarterly sector accounts with household survey data from the Central Statistics Office. Similar data was published at a European level by the European Central Bank in January of this year.

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