The good news is we are all loaded. The net wealth of Irish households is nearly €1.3 trillion, averaging about €228,000 each. Most readers won’t find that kind of money in their banking app however, because some €156,000 of this is housing wealth, the bricks and mortar we live in.
There is more good news though. The Irish “Gini coefficient” – the measure of the wealth gap between the richest and the poorest – has reduced significantly since it started in 2013. At 64.6, it sits below the European average of 72.4.
A lot of this reduction, however, is down to growth in property values. When property values rise, it suggests poorer households have more money. Politicians can easily point to this lessening gap as evidence of policy success. But this is nominal wealth. You can’t use your house to pay for food or nappies.
Poorer households are particularly vulnerable to this paper wealth illusion and the policies that flow from it. The wealthiest households only have 43 per cent of their wealth in housing; the poorest have 75 per cent (and the most debt).
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On a consistent downward trend , only two-thirds of us are homeowners and half of homeowners have no mortgage whatsoever, making the gap between owners and renters all the greater: renters have a median net wealth of about €5,300 and homeowners €303,000. Despite comprising nearly 30 per cent of all households, renters own just 3 per cent of Ireland’s total wealth, unchanged since 2013.
There is already tension between the wealth-haves and the wealth-have-nots, and more brewing. Government policy supports the development of more, reduced-quality, expensive housing for rent. Tax breaks introduced with no analysis, according to the Government’s own Parliamentary Budget Office (PBO), and “no expectation or requirement that a VAT reduction [for housing] would result in lower prices for consumers”, according to then-minister for finance Michael McGrath, will exacerbate these tensions.
Housing inequality plays out in several ways.
Whether you own a home or not is now a huge factor of division in society. In a change from the past, you can be well educated and earning a decent wage and still be stuck renting, leading to financial and social insecurity. The system puts one group of people at a considerable disadvantage to others.
Age is also a significant factor in wealth inequality. Older people have had more time to acquire assets and earn more, but have also benefited from easier access to housing, frequently aided with grants. Less than a third of all new housing came to the market last year; 20 years ago this was nearly 70 per cent. The younger you are, the more stymied you are in terms of access to housing wealth. First-time buyers have an average age of 36 – up from 29 in 2005. This rises to 42 if you’re single.
Although most homeowners have some form of wealth in their houses, not all are necessarily wealthy: it very much depends on where the house is located. Data published by property firm Geowox revealed that the median price paid for a home in Dublin 6 rose to almost €800,000 in the third quarter, making it the most expensive district in the State. Dublin city was the most expensive city, with a median price of €568,000, while Longford was the most affordable at €240,000.
In absolute terms, homeowners in cities, in particular, benefit hugely from unearned capital appreciation. Others less so. Global technology companies locate in cities where they pay annual average salaries of €155,000, according to recent analysis by this paper. Longford has a disposable income per capita of €22,251; in Dublin this is €32,393. Forty per cent of salaries in Dublin come from foreign enterprises, twice the figure for Monaghan. The upshot here is regions of the country feel poorer, left behind and occasionally resentful.
Naturally, parents with housing wealth want to pass that wealth on to their children. Parents who have no housing wealth have nothing to pass on and so the inequality perpetuates – and as fewer people are becoming homeowners, this inequality will increase over time.
The socioeconomic environment we grow up in has a huge impact on our careers, relationships and lives in general. This is also important politically. Young people feel unfairly generationally excluded and disillusioned despite getting trades, degrees and jobs. They’ve fulfilled their side of the bargain but feel the State hasn’t. So much for meritocracy then.
Voting the same as your parents is now the exception rather than the rule, so as we’ve seen in the recent presidential election, the impact of young voters is not to be underestimated. Neither is the impact of renters. In a recent Red C poll, renters are half as likely to vote for Fine Gael or Fianna Fáil as homeowners. They are twice as likely to vote for Sinn Féin (as are young voters).
Fianna Fáil in particular have lost their north star in housing, with not a cigarette paper between them and Fine Gael’s neoliberal, deregulatory approach to infrastructure and housing, an approach similar to the one outlined by John Collison in this paper recently.
Fianna Fáil’s traditional deference to developers has aligned with Fine Gael’s deference to investors and their money, and so their policies have become one. No one in either party seems to be thinking about the impacts of reduced access to home-ownership, forced renting and social and financial inequality on future election results.
The Government persists with policies that perpetuate housing inequality – whether it’s bailing out developers, tax-free income for large landlords or “consumer support” schemes that maintain the high price of housing. At the same time, the PBO finds that “Budget 2026 will significantly impact low-income households equivalent to an average decrease in annual income of 4.5 per cent for the poorest 10 per cent of households”.
This illustrates a claim by Professor Seán Ó Riain of Maynooth University that there is “class bias” in Irish Government policy: the State helps the better off much more than the disadvantaged. On RTÉ Radio recently, Fianna Fáil’s John McGuinness observed: “We have stopped responding to the public need, and we have stopped responding and representing those who are less well off in society.”
The older, wealthier, homeowning cohort who tend to vote for Government parties to protect their own interests won’t be around forever, or even that long in election cycle terms. What then for social cohesion and economic stability – and, indeed, the fate of the Government parties?
Dr Lorcan Sirr is senior lecturer in housing at Technological University Dublin
