Wealth distribution in the eurozone

The eurosystem has worked for a number of years now on a very comprehensive survey, called Household Finance and Consumption Network (HFCN). Data will be published in soon.

The Bundesbank yesterday gave a press conference on some of the results of the German survey. The presentation by Heinz Herrmann and Ulf von Kalckreuth, the two researchers at the Bundesbank running the survey, provides a number of interesting insights. The most interesting but also controversial one will certainly be the distribution of wealth across countries of the euro area. For convenience, I copy paste the table from the presentation below.

A number of results stand out.

First, the average wealth in Germany is lower than in France, Spain and Austria. The German statistics, however, look different when excluding East Germany. Then, average wealth is slightly above France but still below Spain and Austria.

Second, the wealth distribution in Germany seems to be more unequal than the other countries considered. The median household, i.e. the household with an equal number of richer and lower households around, owns only a net property of 51k euros. This means only a quarter of the average net property. This contrasts with much richer median households in France and more than 3 times richer households in Spain and Italy.

Third, the low net property in Germany is correlated with the low home ownership in Germany. Only 44% of German households own apartments. Yet, it is shown that buying an apartment is a central factor for saving.

This leaves a number of important questions: Why apparently do high savings rates in Germany and the high macroeconomic saving not translate in high wealth? Is the high saving appropriate to allow German households to accumulate wealth to catch up with the South of Europe? Is the main reason for low household wealth the savings accumulation in corporations whose ownership is more concentrated? How much has wealth dropped in the years since the survey was first conducted due to the decline in the property markets in the South of Europe? The HFCN offers for a rich research agenda ahead.