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The source I linked shows the Ireland housing index going from around 33 in 1995 to over 180 in 2025. That's an over 6x real return, which equates to a rate of

The source I linked shows the Ireland housing index going from around 33 in 1995 to over 180 in 2025. That's an over 6x real return, which equates to a rate of return of over 6.5% after inflation. Looking at the CEIC data you linked, which is not inflation-adjusted, it shows household income increasing from just under $20k in 2003 to around $40k in 2023. Plugging that into the CAGR formula you get a 3.5% nominal annual return. So house prices have increased at over 6.5% annually after inflation, while household incomes have increased at 3.5% before inflation. And your other link makes it clear that the change in wealth distribution is really just a side effect of the housing bubble: > The Gini coefficient fell from 0.78 in Q2 2013 to 0.70 as of Q4 2020, before declining sharply since 2021 (Chart 3). This steeper decline in 2021 is driven by increasing net wealth for the Bottom 50%, accounted for by a combination of a decline in this groups mortgage liabilities and, to a lesser extent, an upward appreciation in the value of housing assets. As a consequence, by Q1 2022 the Gini coefficient for Ireland stood at 0.68.

derriz 1y ago
Yes I made a mistake in my calculation - household income (from that CEIC data) rose 4.1% per annum between end of 2012 and the end of 2023. Your graph comes from BIS data - picking 1995 as starting point is a little unfair as that's exactly when house prices started to rise - if I measure from 1990, the rise (using BIS nominal nominal to make comparison easier) is 5.1% per annum. But yes house prices have risen faster than household incomes. Like pretty much everywhere else in the world. > And your other link makes it clear that the change in wealth distribution is really just a side effect of the housing bubble The claim I was contesting was that wealth inequality had increased in the last few decades. It has not - it has decreased significantly.

derriz 1y ago

Yes I made a mistake in my calculation - household income (from that CEIC data) rose 4.1% per annum between end of 2012 and the end of 2023. Your graph comes from BIS data - picking 1995 as starting point is a little unfair as that's exactly when house prices started to rise - if I measure from 1990, the rise (using BIS nominal nominal to make comparison easier) is 5.1% per annum. But yes house prices have risen faster than household incomes. Like pretty much everywhere else in the world. > And your other link makes it clear that the change in wealth distribution is really just a side effect of the housing bubble The claim I was contesting was that wealth inequality had increased in the last few decades. It has not - it has decreased significantly.