Half the wealth of Ireland is owned by the richest 10%, a Central Bank report has found.

Yet the gap between rich and poor is falling in Ireland and is now one of the narrowest in Europe.

People’s total wealth topped a staggering €1,246.5bn at the end of last year, increasing by 3.5% – around €43bn – since the end of September.

However, the wealth is not in cash available to spend but is mostly locked up in the value of our homes, which increased by €28.3bn to €839.7bn.

Housing made up more than two-thirds of our worth – 67.4% – and almost 60% of total assets of Irish households.

Conversely, the amount people owe in loans – mostly long-term loans such as mortgages – was unchanged from the previous three months at €163.6bn.

The richest people kept almost a quarter of their money in a “more diversified portfolio composition” such as investments in unlisted companies, the report said.

Poorer households held the largest part – about a fifth – of their financial wealth in deposits such as savings accounts which give paltry returns.

However, Ireland has one of the smallest gaps between rich and poor in the EU and it has been improving, the Central Bank’s latest Household Wealth Report showed.

The Irish Gini coefficient – a measure of wealth inequality – was 65.

The figure represents income inequality, wealth inequality or consumption inequality within the population.

It is measured between 0 and 100, with 0 being everyone has the same income and 100 denoting one person has all the income.

The Central Bank report explained: “This remained well below the value of the same index for the euro area as a whole – 72.4 – and of most other European countries, as it has been for the past years.

“Moreover, since the beginning of the series in 2013, the Gini coefficient for Ireland decreased significantly – down 12.3 points – indicating a notable reduction in the level of wealth inequality.”

It added: “The sustained de-leveraging process of poorer households and the rise in value of housing assets – which mainly benefited households for whom this asset represents a larger component of their total wealth (ie, mid-lower deciles) – drove the increase in the share of total net wealth held by the poorest half of households.

“As a result, net wealth inequality in Ireland significantly decreased since the beginning of the series.”

Rising house prices are why poorer families’ wealth inequality with the better-off has improved, the report showed.

As well as savings, total financial assets of Irish households were worth €570.4bn, representing an increase of more than 2.5%, or €14.9bn, over the three months and mainly made up of insurance and pension entitlements at €271.5bn.

*This article was originally published on BusinessPlus.ie.