Ireland ranked second in list of wealthiest nations

Ireland ranked second in list of wealthiest nations

By Éanna Ó Caollaí Last updated: 10-07-06, 10:15

Ireland has been placed second in a list of the eight wealthiest OECD nations.

The report, which claims every Irish citizen is worth an average of €150,000, places Ireland ahead of the United Kingdom, United States, Italy, France, Germany and Canada.

The report, published today by Bank of Ireland Private Banking, says Ireland is second only to Japan, which has an average of over €205,000 per head of population.

The report measures wealth by taking account of privately owned assets such as property and financial assets such as pensions, shares, and other financial investments.

Despite the increase in house price inflation over the last decade, the report says the country has some 30,000 millionaires when the value of principal private residences are excluded.

Of these, 300 have an estimated value of more than €30 million, while some 2,700 are worth between €5 million and €30 million.

If the value of the principal private residence of citizens was taken into account, the number of millionaires in the Irish economy could be as high as 100,000, according to the Bank of Ireland report.

However, Pat O’Sullivan, Senior Economist and author of the report, said although debt as a percentage of disposable income had increased from 89 per cent to 140 per cent over the last five years, “the level of wealth provides an enormous cushion to borrowers”.

Ireland has recorded a net growth in wealth of 350 per cent over the past decade, and the report forecasts it to reach €1.2 trillion by 2015.

It is predicted property will continue to be dominant but will no longer be the pre-eminent asset of choice; other assets, more particularly equity markets, bonds and cash, are predicted to come to the fore.

Personal savings stood at €10 billion at the end of 2005, and this is forecast to reach €13.5 billion by 2010 and €24 billion by 2015.

© 2006

Ireland is second in wealth league

July 10, 2006 11:47

A decade of house price inflation has catapulted Ireland into second place in the global wealth league, according to a new report from Bank of Ireland Private Banking.

The report published today shows that when the value of housing is taken into account Ireland’s privately owned assets are now worth an average of €150,000 for every man, woman and child in the country. The report says that the bulk of this wealth has been created in the past decade alone.

The Japanese are the only people in the world wealthier than the Irish, according to the report, which values our houses and financial assets - like pensions, shares, and other investments - at almost €800 billion.

If €115 billion owed to banks for mortgages and other loans is subtracted, the result, is €680 billion. Property, however, accounts for three-quarters of this amount, a higher proportion than any other country. The massive property boom has resulted in a massive 350% increase in wealth in a decade.

Bank of Ireland says that even when the value of principal private residences is excluded, Ireland now has 30,000 millionaires. It estimates 300 of these have more than €30m each, while 2,700 people have between €5m and €30m apiece.

SUBTERFUGE spelt with “smoke & mirrors”.

More “FACT” form the vested interests.

I love the comparison with Japan, how fitting, I am sure they could tell us a thing or two about their “bubble” economy.

I said it before and I’ll say it again, we are nothing compared to the Japanese in REAL wealth. They are a very cohesive society, who more less produces the worlds technology & major R&D, what do we do?

If the Oil is gone tomorrow they can go for 120 days seemingly, whiel Ireland couldn’t even manage 48hours according to industry experts.

They have a world class transport system, lower cost of living , lower goods prices and there are 120 million of them.

Its funny outside of Japan, Ireland had the highest ownership of Playstations (ONE that is) so maybe we are more similar pyschologically, you know an “Island mentality”, “us & them”?.

Japan and Ireland have so many similarities, I wonder will we seal the deal and have our very own bubble burst, casue it looks like it we are well on the way.

The Sunday Times July 16, 2006
Irish outlook: Michael Casey: Ireland’s wealth just isn’t working, … 29,00.html

GEORGE BERNARD SHAW wrote that Ireland was a poor country full of rich people. A recent report from Bank of Ireland that suggests we have between 30,000 and 100,000 millionaires gives credence to his view. But some caveats are in order.
First, this is a study of personal wealth not the nation’s. The latter would have to include valuations of natural resources, the fish in the sea, our infrastructure and so on. But such national balance sheets are not available. Given Ireland’s poor infrastructure, we would not rank as highly by this yardstick.

In looking at the wealth of a country it is important to have accounts for all four main sectors: household, government, business and external. Often when one sector is in surplus, another is in deficit, and it is important to examine all sectors for consistency and form a comprehensive picture of financial flows from year to year.

These financial accounts are being prepared by the Central Bank, but are not yet available. When finalised they will represent a significant improvement in our economic database.

Second, it should be noted that, in terms of income, Ireland would probably rank about eighth or ninth in the world. The Bank of Ireland research, which placed the country in second place, compared Irish incomes with those in the top eight countries in the OECD (Organisation for Economic Co-operation and Development) as ranked by gross domestic product. Many countries, including Norway, Luxembourg, Kuwait, Switzerland and Denmark, have higher incomes but do not figure in the Bank of Ireland wealth comparison.

Finally, although the measure of personal wealth does deduct personal debt, the net wealth figure includes the value of second homes. On this basis we have 30,000 millionaires. If the main residences are added in, this figure jumps to 100,000 millionaires.

***The second, third and fourth homes clearly account for a substantial part of the wealth of the 30,000 millionaires. If those homes are excluded, Ireland is no longer second among those OECD nations in the Bank of Ireland comparison. The figure of €150,000 wealth per head slumps to €18,000, leaving us in last place. ***

Despite this sobering thought, the calculation that threw up the key figure of €150,000 per head of population (including second homes) does not seem unreasonable. Since gross national product (GNP) per head is about €35,000, this means that, on average, an Irish person has a net wealth of about four to five times his or her annual income.

But when you take out the second home(s), the net financial wealth falls to €18,000 or about half the annual income. This may be a little low, given that the savings rate has been relatively high in Ireland for many years.

Averages can be misleading and in discussing wealth can even be dangerous. Many people have no savings and indeed may be highly indebted to financial institutions.

At the other end of the spectrum thousands of millionaires collect rents from tenants, as well as making considerable capital gains from the value of their properties.

Discussions about inequality and poverty in this country are usually based on income data, because information on wealth has been patchy and unreliable. The Bank of Ireland study could change that situation.

An unintended consequence of this report is that it may be used by certain parties to argue for the introduction of a wealth tax, especially if other sources of revenue weaken.

The last wealth tax, introduced in the 1970s, was flawed in large part because the ratio of administrative costs to tax yield was very high. But now, with so many millionaires in the country, it might be argued that the administrative costs could be spread over a much wider base.

There are problems with all wealth taxes, but there is one advantage that is rarely alluded to. The utility of money declines as a person acquires more and more of it. A multimillionaire does not get much more utility from a seventh bathroom in his mansion nor a fifth Mercedes.

In other words, the seriously rich wouldn’t miss the money taken by a wealth tax, whereas the poor person who receives a small grant from the state would benefit greatly.

It is interesting to note that Japan comes first in the Bank of Ireland league table with a wealth figure more than 40% higher than ours.

Could this be why the Japanese economy failed to grow for more than 10 years? There the rich tend to be older and they don’t spend very much. At the same time poorer people are worried about inadequate pension provision and don’t spend either. Could this be a problem for Ireland in the future? The most obvious factor to emerge from this survey is that estimates of Irish wealth are heavily influenced by bricks and mortar and the rapid increases in property prices. If just 10% of the population decided to liquidate some of their property in Ireland, prices would fall. In all such wealth estimates there is a kind of fallacy of composition at work. One person can realise his or her wealth, but a significant proportion cannot because the market will move against them.

There is also the tangled question of fundamental value. If it is believed that house prices are well above their fundamental value, it follows that wealth estimates based on these prices are also likely to be overstated. Hardly anyone wants to say that houses are overpriced because most people have a vested interest in seeing prices stay at their current levels. No doubt youngsters without a foot on the property ladder would be keen to express an opinion on the emperor’s clothes, but we must await a survey of disenfranchised youth to support that view.

When talking about wealth, it is important to realise that investing in property to the extent that has taken place in Ireland does not add much to real national wealth. A house, for example, has many of the same characteristics as a consumer good. It is not as “productiveâ€


But how much of that GDP actually goes into the pockets of the average person!


Sure 19 billion of it is borrowed GDP anyway

If we’ve got it, let’s spend it! :open_mouth: … w-RUG.html

pathetic populist nonsense

what they left out was they are selling the ambassadors residence . your man is going to have the use the carpet as a fancy tent to live in as well as to greet the Austrian Emperor. Another example of strong leadership by enda. Enda & Michael rock in Europe, where would we be without them? XX

A bit of a slide from 2006’s dizzying heights of the mania fuelled bubble madness.

From The Journal, 19th June 2014



Blue Horseshoe

… and still living beyond our means.

The sad thing is the amount of people who believed that nonsense originally.
I’d say a lot of people today still believe that Ireland was a rich country/richest country in the world, and that the previous status is something that Ireland can go back too.