# average household 670000 euro wealth



## barryl (12 Feb 2008)

heard this reported this morning on the radio.the average wealth per household is 670,000 euros in ireland.this seems very high to me as average house price is 298,000 euro and average income is c.33000 euro ! this cant be right???


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## Caveat (12 Feb 2008)

Heard that too - not sure of the source of the report.

But "worth" I think was the specific word used - and it may have been used loosely. This may include possessions that aren't paid for.  E.g., same report also said that Ireland has a higher per head ownership of Mercedes than Germany.  Debatable as to how many of these are actually "owned" I suppose.


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## ClubMan (12 Feb 2008)

Anybody know what [broken link removed] were based on?


> Average wealth amongst those who own their own home stands at €674,000, according to NIB estimates.


"Own their own home" could mean people who are mortgage free I suppose?


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## John Rambo (12 Feb 2008)

It is supposed to be net of debt. And it's per household, not per individual.


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## Protocol (12 Feb 2008)

Average incomes are not 33,000.

Total GDP income per person is about 40k, that means average GDP income per household of maybe 80-100k.

GNP income per person is about 35k.

The average industrial wage may be about 30-35k, but this ignores huge amounts of non-wage incomes, e.g. rental incomes.

Take an anecdotal example: rents on high streets all over Ireland are high, and have risen strongly. So rental income has been growing strongly.


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## Protocol (12 Feb 2008)

*Here is a link to a Central Bank report on household wealth:

[broken link removed]


Table 1: Balance Sheet of the Household Sector, 2001-2005​*\​​*million*​*
*2001 2002 2003 2004 2005​*Financial Assets:​*Currency and deposits 53,576 58,345 63,446 70,249 82,907
Securities other than shares 735 727 613 414 370
Shares and other equity 54,678 58,974 65,021 68,299 74,332
Insurance technical reserves 67,103 63,650 81,078 94,912 112,974
Other accounts receivable 762 926 1,119 1,245 2,317
Total Financial Assets 176,854 182,622 211,277 235,119 272,900​*Financial Liabilities:​*Loans 60,930 73,052 87,886 109,709 141,886​_of which residential mortgages 38,343 47,212 59,242 77,029 98,956​_Other accounts payable 1,909 2,158 2,560 2,794 3,332
Total Financial Liabilities 62,839 75,209 90,445 112,503 145,218​*Net Financial Assets 114,015 107,412 120,832 122,617 127,682​*as a % of GDP 97.7 82.7 87.0 83.1 79.2
as a % of Net Disposable Income​​*a *n.a. 169·6 180·8 174·9 164·0
Housing Assets 297,302 338,948 408,808 473,671 546,096​
*Net Asset Position 411,317 446,360 529,640 596,288 673,778​*as a % of GDP 352.3 343.5 381.2 404.1 418.1
as a % of Net Disposable Income​​*a *n.a. 704.8 792.3 850.6 865.6​
*a​*_​_​​This ratio is based on households’ net disposable income from the CSO _Institutional Sector
Accounts _— item B.6n in Table 1.5.​
*Sources:​*_​_​​CSO Institutional Sector Accounts and CBFSAI calculations of housing assets.​
from 63 per cent to 70 per cent of total loans over the period.​


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## Remix (12 Feb 2008)

"Irish wealth passes €1 trillion mark" (rte.ie) 

With the single most important driver of this being property values.

When I was living in the US I often heard aggregate property values being quoted but that was in the context of *property* *taxes* when some district was projecting its yearly tax revenues.

The dept of finance dept must be drooling. They very kindly reduced stamp duty and all they need now is a teeny tiny property tax of say 1% and they could raise nearly €10 billion per year from all that "real" wealth out there.


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## Afuera (12 Feb 2008)

Remix said:


> The dept of finance dept must be drooling. They very kindly reduced stamp duty and all they need now is a teeny tiny property tax of say 1% and they could raise nearly €100 billion per year from all that "real" wealth out there.


With 80% homeownership in Ireland, an across the board tax like that would not be popular and is unlikely in my opinion. There is definately scope to tax vacant properties however. According to the last census there were about 300k properties in this category so a 1% tax on the average price would be able to pull in an extra billion for the Excequer without upsetting too many.


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## rmelly (12 Feb 2008)

Afuera said:


> without upsetting too many.


 
apart from the 300,000 or so owners...


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## csirl (13 Feb 2008)

Dont forget that the average wealth includes the enormous wealth of the super rich. In a small country like Ireland, a few super rich multi billionaires can drive the average up.


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## rmelly (14 Feb 2008)

the effect of super rich on these figures is probably not as large as you'd think. For example 20 billion would add 26,666 assuming spread over 750,000 households, compared to the figures above this is a small percentage.


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## Purple (15 Feb 2008)

There's only a couple of Irish people worth over two billion. According to  list there were 6 Irish billionaires in 2007 with a combined wealth of €11 billion. 
It does say that one in every 100 Irish people in a millionaire (even excluding the value of the family home) but that may not be the case now with the reduction in the value of property and pension funds. It is also probably the case that every second senior civil servant is a millionaire if the value of the fund that would be required to pay their pension is taken into account but since they don't have access to this money it's not really tangible.


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## csirl (15 Feb 2008)

> heard this reported this morning on the radio.the average wealth per household is 670,000 euros in ireland.this seems very high to me as average house price is 298,000 euro and average income is c.33000 euro ! this cant be right???


 
Average income is a per person thing includes all people in the workforce which includes people who are unemployed,  people working part time etc.

The average income of a full time worker is a lot higher. The average industrial wage is also the average wage for industrial workers, not all workers - bear in mind that the services sector is larger than the industrial sector in Ireland.



> Total GDP income per person is about 40k, that means average GDP income per household of maybe 80-100k.


 
This sounds about right.


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## gurramok (16 Feb 2008)

Protocol said:


> Average incomes are not 33,000.
> 
> Total GDP income per person is about 40k, that means average GDP income per household of maybe 80-100k.
> 
> ...



Rental incomes which vary are subject to tax, a very small minority have rental income

Mean incomes are much lower than 35k. Nearly 80% of the entire workforce earn 35k or under, thats a fact from the govt themselves.

Have a look: http://www.budget.gov.ie/2008/downloads/DistributionOfIncome.pdf


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## barryl (26 Feb 2008)

csirl said:


> Average income is a per person thing includes all people in the workforce which includes people who are unemployed, people working part time etc.
> 
> The average income of a full time worker is a lot higher. The average industrial wage is also the average wage for industrial workers, not all workers - bear in mind that the services sector is larger than the industrial sector in Ireland.
> 
> ...


 

 average income includes the unemployed?? how can you include the unemployed...they have no income.


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## dodo (26 Feb 2008)

It was just mentioned again the average wage is 33K a year in Ireland


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## csirl (27 Feb 2008)

> average income includes the unemployed?? how can you include the unemployed...they have no income.


 
They  have unemployment benefit.


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## barryl (9 Mar 2008)

csirl said:


> They have unemployment benefit.


I dont believe that ub can be included as average income


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## GeneralZod (9 Mar 2008)

Of course UB benefit should be included when calculating average income.  Their "work" is looking for employment. Their employer is the state.


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## barryl (11 Mar 2008)

GeneralZod said:


> Of course UB benefit should be included when calculating average income. Their "work" is looking for employment. Their employer is the state.


I don't agree with you,imo they receive benefit not earned taxable income,not all sw recipients are looking for work some are not able to work,do you include these when calculating national average income, I doubt it


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## Purple (15 Mar 2008)

barryl said:


> I don't agree with you,imo they receive benefit not earned taxable income,not all sw recipients are looking for work some are not able to work,do you include these when calculating national average income, I doubt it


Income is income. Of course SW should be included.


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## barryl (15 Mar 2008)

Purple said:


> Income is income. Of course SW should be included.


 
should they also include as average income, old age pension,children's allowance,disability pension etc


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## Protocol (16 Mar 2008)

GDP income does not include transfer payments.  It is just earned income.


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## GeneralZod (16 Mar 2008)

According to this definition of GDP it does.

Pardon it doesn't.

The Wikipedia definition of government spending says it includes it.


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## Protocol (18 Mar 2008)

GDP = value of our national output of goods and services

= value of all final expenditures

= value of national income

It does not include transfer payments to households.


GDP in Ireland is approx. 180 bn euro in 2006, or approx. 40,000 per person.


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## barryl (20 Mar 2008)

Purple said:


> Income is income. Of course SW should be included.


 
so this post is incorrect then?


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## Protocol (21 Mar 2008)

Ok, to clarify some points: this started as a discussion of household *wealth*, but seems to have moved towards household *incomes*.

Wealth and income are NOT the same.

The income of the nation is measured by the value of our GDP.  This is the value of all output produced.  It is also the value of all earned incomes.

In 2006, our GDP = €174,705m or approx €175bn.  This equates to *€41,205 per person*.

In Ireland's case, it may be better to use the GNP figures, which are €149bn in 2006, or *€35,173 per person*.

For data, see: [broken link removed]

Note: this is not the same as average wages, industrial wages, disposable income, etc.

Wealth is a *stock of assets*, whereas *income is a regular flow*.

To get some measure of our wealth, here is a Central Bank article on Irish household wealth:

[broken link removed]

According to the article, our estimated financial wealth in 2005 was €128bn.  This, added to housing wealth of €550bn, gives a figure of approx. *€675 bn*.

That means an average of *160,000 per person,* that includes every man, woman and child.


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