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22nd Oct 2021

ECB: German households less wealthy than Cypriots

  • Berlin graffiti - Germany's economic powerhouse image masks realities of average people (Photo: Valentina Pop)

Luxembourg tops the ranking of Europe’s wealthiest households followed by Cyprus while Germany is at the bottom, according to a survey report released by the European Central Bank on Tuesday (9 April).

The survey spans 15 member states and looked at, among other things, the median net wealth of 62,000 households.

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Most of the data was collected in 2010 but some was gathered in 2008 like in Spain when the housing bubble had artificially inflated prices.

The same houses in Spain are worth much less today, Christoph Schröder from the Institute of the German Economy in Cologne told Spiegel Online.

The 113-page report looks at a range of indicators and notes that a number of caveats may distort results.

“The data for Cyprus appear not to be comparable with those for other euro area countries in a number of dimensions and should therefore be interpreted with caution,” says the report.

The report says the differences between Cyprus and other euro area countries “emanate to a large extent from historical, cultural, and institutional factors”.

Inheritances, intergenerational transfers, household composition, land ownership and allocation of household wealth between real and financial assets differ widely across the surveyed member states.

But among homeowners, the household main residence constitutes by far the most valuable asset, notes the report.

The median net wealth of homeowners across the countries surveyed is €241,200. Those with a mortgage report a median figure of €171,100, while those renting have a median net wealth of €9,100.

People in southern European countries tend to own their homes and are more likely to operate a small business unlike in Germany where more people have part-time contracts and are more likely to rent.

Less than 50 percent of Germans and Austrians own their own homes. The large role of public housing in Germany also contributes to lower home ownership rates,

“The low home ownership rate in Germany is in part due to the construction of social housing after World War II and in part due to taxation of owner-occupied housing and the lack of tax deductibility of interest payments on mortgages,” notes the report.

Meanwhile, households with more adults like in Cyprus, Malta and Slovakia also tend to accumulate more wealth related to real-estate than smaller households found more often in the Netherlands, Austria or Finland.

Given the comparative differences, German household net wealth comes out to around €51,400 compared to Cyprus at €266,900 and Luxembourg at €397,800.

Greece ranks in at €101,900, France at €113,500, and Spain at €182,700.

“It should be kept in mind that the survey focuses on one particular type of wealth, i.e. wealth of private house holds,” says the report.

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