Central Bank reports household wealth up €11bn in third quarter

Irish households’ wealth grew by €11 billion in the July-September period of last year. The quarter-on-quarter rise in net household wealth was the first such increase since the beginning of 2008, according to new data from the Central Bank.

The rise brought household net worth to €456.9 billion, or €99,646 per capita. However, the figure was still more than a third below its peak.

Improvements on both sides of household balance sheets caused the rise in wealth; debt levels fell, while the value of households’ assets rose.

Household debt

Household debt to disposable income, an indicator of debt sustainability, declined further during the third quarter of 2012, to stand at 203.8 per cent, its lowest level since the last three months of 2008.

In a separate release, the Central Bank said lending for house purchases fell by 1.6 per cent over the year, with a 10 per cent decline in loans for consumption and other purposes.

Loans to households fell at a rate of 3.9 per cent in the year to December, picking up pace from the 3.6 per cent recorded in November.

Month-on-month, the value of loans to households fell by €372 million last month, mainly fuelled by a fall of €324 million in non-housing and non-consumption-related loans. Home loans were down by almost €4 million, and loans for consumption were €44 million lower over the month.

Companies also saw a decline in lending, with overall figures showing a 3.6 per cent fall over the year.

On a monthly basis, company loans were down by €385 million compared with November, the Central Bank said.

Medium-term loans fell by €306 million during the month, with short-term loans down by €168 million. Longer-term loans were €88 million higher.

Deposits up

Private-sector deposits were up 2.5 per cent in December, with both household and company deposits increasing 1.1 per cent over the year. Insurance firms, pension funds and non-bank financial intermediaries increased their deposits by 6.9 per cent.

The data also showed that Irish banks’ dependence on Central Bank funding continued to fall in December.