Wealth in the monetary union is very unequally distributed. The wealthiest 10 percent of households own 56 percent of total net worth, according to a recent study by the European Central Bank released on Monday. The advantage of the super-rich is even more striking: the top five percent of the wealth scale owns 43 percent of the net assets, while the wealthier half of households in the euro zone, i.e. 50 percent, own just five percent.
The total assets in the monetary union now amount to around 60 trillion euros, which corresponds to an increase of 29 percent or 13.7 trillion euros in the last five years.
Overall, according to the central bank, inequality in wealth distribution fell during this period – albeit minimally. This was due to the development in the value of the real estate, from which not only the richest but at least all home buyers could benefit. The European Central Bank’s long-standing zero interest rate policy triggered a strong construction boom, but only those households that could afford a mortgage loan benefited from it. As a result, homeowners have recorded around 27 percent growth in assets over the past five years, while renters, who make up 40 percent of households in the euro zone, only gained 17 percent, according to the central bank’s findings.
Overall, the so-called median net worth, which marks the middle of the wealth distribution and divides households into a richer and a poorer half, rose by around 40 percent to 150,000 euros. The median is more meaningful than the average value because the latter is strongly influenced by extremely high wealth.
For its study, which is now to be updated quarterly, the central bank evaluated a representative survey of 80,000 households. All data are only approximations because the respondents estimate their financial situation themselves, which can lead to exaggerations or understatements.
Fewer homes, less asset growth
Overall, according to the ECB, the distribution of wealth in the euro zone is different. In Spain and Portugal, far fewer people own their own homes than in Germany and Austria – which means that the growth in assets here was lower. In some member states, on the other hand, house prices have not risen as sharply as in Germany, for example. The recent decline in real estate prices, triggered by the ECB’s key interest rate increases, has not yet been taken into account in the statistics.
In Germany, according to the Bundesbank in its 2023 study, the wealthiest ten percent of households own 56 percent of the total net assets, while the wealthiest half of households only own three percent. Real estate ownership and business assets in particular would determine which asset class a household finds itself in.