Abstract:The rapid increase in personal or household credit has received considerable attention in recent years. By contrast, relatively little attention has been paid to the evolution of household assets. In ...The rapid increase in personal or household credit has received considerable attention in recent years. By contrast, relatively little attention has been paid to the evolution of household assets. In this article, an attempt is made to measure household wealth and to derive estimates for the evolution of households’ net assets, or net worth, since EMU entry in 1999. The results are, on balance, positive. While personal credit grew more rapidly than personal deposits over the period, growth in other financial assets, especially claims on insurance companies and pension funds, more than compensated for this. Most of the increase in households’ net worth, however, came from the rise in the value of the housing stock, driven by record levels of new house building and significantly higher prices. This favourable net worth position must be qualified in a number of ways. First, with regard to the distribution of liabilities and assets. In this respect, there are indications that in Ireland net worth may be relatively highly concentrated in older age groups. Second, with regard to the valuation of assets. With houses accounting for some 70 per cent of household assets, the level of house prices obviously has an important impact on net worth. If houses are overvalued, then so is net worth.Read More
Publication Year: 2006
Publication Date: 2006-07-01
Language: en
Type: article
Access and Citation
Cited By Count: 4
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot