It’s official: The Irish are getting richer, says Credit Suisse

Your bank account may beg to differ, but Credit Suisse’s latest global wealth survey says the Irish are getting richer. Not only that, we are getting richer quicker than our friends across the Irish Sea.

Household wealth in Ireland is growing at the sixth fastest pace in the world, according to the seventh annual global wealth report from Zurich-based bank. The total wealth of Irish households rose by $38 billion to $770 billion (€ 725 billion) in 2016, up by 5 per cent on 2015.

This means that Ireland now has a 0.3 per cent share of global wealth. Back in 2000, we had a share of 0.2 per cent and wealth per head of $91,525.

Ireland is in sixth place in terms of both change in total household wealth (+5.2 per cent) and change in wealth per head (+4 per cent). That puts up behind only Japan (19.3 per cent), New Zealand (14.1 per cent), Hong Kong (8.1 per cent), the Czech Republic (6.8 per cent)and Indonesia (6.4 per cent).

Of course, much of this wealth generation is coming at the top end: Some 169,000 Irish people were in the top 1 per cent for global wealth in 2016, up by 6 per cent on 2015. In addition, some 7,000 Irish people became dollar millionaires last year.

This pace of growth means that, in 2016, wealth per adult in Ireland stood at $214,589 (€202,208), up by 4 per cent or €7,745 from 2015.

Irish median wealth

“Median” wealth indicates the middle wealth value, which is the level that represents more people (as average is swayed by the high net worth). In Ireland it is $80,668 per adult. Irish adults have debt of $50,762 per adult. Ireland’s household wealth previously peaked in 2007 at $222,823, before falling to $176,881 in 2011.

In comparison, wealth per adult in the UK is $288,808, with debt of just $48,893 and median wealth of $107,865. The US has wealth per adult of $344,692, debt of $56,793, and median wealth of just $44,977.

The richest European country is Switzerland, where the median wealth is $244,002, debt is $143,364 and wealth per adult is $561,854.

Rising house prices are behind the resurgence in Irish wealth, which may be why so few of us have yet to feel an uplift. Property accounts for 60 per cent of our wealth ($156,509), compared with 47.6 per cent in the UK, 58.9 per cent in Germany and 28.3 per cent in the US.

According to the Credit Suisse survey, almost a third of Irish residents (31.8 per cent) have wealth of less than $10,000; 23 per cent lie in the $10,000-$100,000 range; 42.2 per cent have wealth of between $100,000-$1 million; and 3.1 per cent, or 110,000 people, fall into the +$1 million category, up from up from 2.6 per cent, or 91,208 people in 2014.

There were no new billionaires, however, with this figure steady on 2015 at five. The US can claim 582 billionaires and the UK 434.

Selling down

The survey also points to a reversal in the trend of Irish people selling down their equity holdings. In 2005, some 22 per cent of the country’s financial wealth was held in equities. This slid to 12.7 per cent in 2014 before advancing again in 2015 to 13.7 per cent. This compares with 44.2 per cent in the US and 12.6 per cent in the UK.

Household wealth in the UK declined by $1.5 trillion, or 10 per cent, the report shows, as “a direct consequence” of the Brexit vote. This means that the number of dollar millionaires in the UK fell by 15 per cent.

“The US had a tumultuous end to 2015-2016, with sharp declines in the exchange rate and the stock market following the vote to leave the EU,” Credit Suisse said in the report. “The outlook is very uncertain, both for the economy and household wealth.”

Global wealth advanced by 1.4 per cent to $256 trillion, reflecting lacklustre economic growth. It is expected to reach $334 trillion by 2021, according to Credit Suisse.