A report on the Irish economy published this week by Davy shows that Irish household wealth has more than doubled over the past decade from €575bn in 2014 to €1.32 trillion in 2024, and is expected to double again to €2.6trn by 2035.

While this certainly reflects the remarkable recovery in the Irish economy over the past ten years, the report does come with a sting in the tail. Most of the increase in household wealth over the period has come in the form of house-price appreciation, rather than increases in diversified and, importantly, transactable wealth.

If someone’s principal private residence has doubled in value since 2014, it is generally of little use to the person as they require somewhere to live and so have little opportunity to realise that increase in wealth.

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When Davy discounts the value of residences from their calculations, they show that only the wealthiest 30% of households in Ireland have any surplus wealth at all.

The report also shows that the poorest half of households in the country only own 14% of the housing assets in the country.

There is also a concentration of wealth in Ireland in Dublin and its environs, where 70% of high-net-worth households are located. Cork has around 12% of the total with Galway in third place.

Davy also notes that Irish households are not managing their resources for optimal return. A very high share of household savings are held in over-night accounts which pay no interest. The report says “Irish households are systematically foregoing risk-free returns on their savings”.

Irish people, in common with their eurozone peers, have low levels of investment in financial assets such as funds and listed equities. The report says that Irish people have a strong affinity for “real-world assets” with residential rental property featuring strongly in the wealth profile of Irish households.

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As the report makes clear, too much Irish household wealth is tied up in housing. But the report is also clear that Ireland doesn’t have enough houses.

It says that infrastructure and, particularly, housing constraints represent the biggest challenge to the Irish economy over the next decade. Housing supply shortages are having “far-reaching and significant societal implications”.

To further illustrate the infrastructure problems the country faces, Kevin Timoney, chief economist at Davy showed at the launch of the report that Ireland’s net capital stock of infrastructure is 24% lower than the average per capita for high income countries.

He said that gap was biggest in housing, health, transport and electricity.

This week, the government published a plan proposing changes to planning rules for critical infrastructure projects.

Among the proposals are actions aimed at speeding up the planning and delivery of major projects such as roads, water treatment and energy substations – all of which should increase the availability of suitable locations for new housing developments.

If successfully implemented, then there is a good chance that the Davy wealth report for 2035 could see a rich country which had less of its money tied up in bricks and mortar.