Fascinating study just released by France's Institut National de la Statistique et des Études Économiques (INSEE) on the economic wealth of the country since 1978. The portrait it paints of evolving household wealth is especially interesting:
- between 1978 and 2007 household wealth has increased 8 fold in nominal terms and doubled in real terms
- In the 1980s household wealth was worth circa 4 years worth of GDP. Today the factor is over 6.5
- in 1978 financial assets (principally currency, deposits, insurance, bonds and equities) represented 30% of household wealth. At end 2007 this was scarcely changed at 33% - but that hides the 46% share it held at the height of the internet bubble
- in 1978 1 million citizens owned shares or bonds - equivalent to 10% of their financial assets. By 2007 it was 12 million and 27%.
- property is roughly two thirds of household wealth split 27% buildings and 35% land
- property inflation in the last decade has pushed net household wealth to nearly 7.5 times annual revenue. In the 20 years to 1997 the multiple averaged 4.4.
- As of 2007 58% of the French owned their own home against 47% in 1978.
- Long term loans (mainly mortgages) were only 26% of disposable income in 1978. Today the share is 69%.
- For the first time in 30 years household wealth is expected to fall in 2008 (by a modest, say INSEE, 3%)
Chart: property and financial market factors driving French household wealth