Property still the main store of wealth for Irish

Despite the slump of the last five years, wealthy Irish people continue to hold over half their assets in property, a new report shows.

The latest issue of Wealth Insights, published by British bank Barclays, shows that Irish high-net-worth individuals hold 55 per cent of their wealth in property and just 2 per cent of it is invested in enterprise or business. Of the rest, they keep 18 per cent in cash, 16 per cent in financial investments and 7 per cent in assets such as collectables.

Focus on bricks
Pat McCormack, head of wealth and investment management at Barclays Bank Ireland, pointed out the emphasis on property has left them with a lower proportion of their assets in other investments than their peers.

“The 16 per cent of wealth held in financial investments in Ireland is half the European average of 32 per cent and significantly lower than the US average, where high-net-worth individuals hold 61 per cent of their wealth in these types of investments,” he said.

He argued there is a case for Irish people to shift the emphasis of their investments as market conditions improve.

The report also indicates the recession has hit wealthy people here harder than their European counterparts.

About two out of three respondents to Barclays’ survey said they had less wealth than at the start of the downturn. That was more than twice the average in Europe.

Almost one-in-five Irish people said their wealth had halved during the recession, compared to just 3 per cent in Europe. However, 70 per cent of Irish surveyed said their wealth had still increased in their lifetimes.

Most Irish people do not follow the trend of giving wealth to family, friends and charities while still alive. Over one-third plan to pass on 100 per cent of their wealth as an inheritance. Mr McCormack said in the developed world people who have made money tend to wait to pass it on, preferring to see the “next generation carve out their own path”. In emerging markets, wealthy people tend to pass on some of it to family and friends.