The average net wealth per family increased by 19.9% in real terms and the median net wealth increased by 31.3% between 2017 and 2020, at the same time that debt ratios were reduced, the INE revealed on Wednesday.
According to the 2020 Household Financial Situation Survey, between 2017 and 2020 the average net wealth per family increased 19.9% in real terms and the median net wealth increased 31.3%by 200.4 thousand euros and 101.2 thousand eurosrespectively, explaining the National Institute of Statistics (INE) that the net worth of a family corresponds to the difference between the value of its assets and its debts.
The data reveal that the asymmetry in the distribution of wealth is “slightly reduced”says the INE, since the families belonging to the 10% with the highest net wealth held 51.2% of the total net wealth in 2020, compared to 53.9% in 2017.
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Both real and financial assets are very asymmetrically distributed, but in real assets the asymmetry is less pronounced in the case of the habitual residence than in the case of other real estate and other real assets, in which businesses for own account.
According to the survey, the families in the highest economic class own 82.4% of the total value of other properties (other than the habitual residence) and other real estate, and 44.3% of the value of the habitual residences.
A Debts are distributed across households across net worth classes less asymmetrically than assetsexcept in the case of mortgages on real estate other than the habitual residence.
In first home mortgages, with the exception of the lowest economic class, which has less than 6% of the value of the debt, the remaining classes share the value in similar proportions, of approximately 24%.
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The survey results also indicate that the Portuguese families prefer to own their homebecause of the families that live in their own house (70% of the families), only 2% preferred to have rented, while of the families that live in a rented house, 63.5% preferred to have bought and did not do so because they did not They had the financial means.
Debt ratios, which measure households’ ability to repay short-term debt and their financial vulnerability, fell between 2017 and 2020.
In the case of the debt service to income ratio, which in 2020 was 12.9% (14.4% in 2017), the INE explains that the reduction mainly reflects the decline in interest rates to historically low levelswhile in the case of the debt/asset ratio, the reduction largely reflects the real estate appreciation.
Households in the lowest income class are particularly vulnerable to rising interest rates, as they have a median debt-service-to-income ratio of around 50%, well above the ratio for other income classes.
In 2020, 46.6% of households residing in Portugal had some type of debtthe most frequent type of debt being the mortgage on the habitual residence (30.5% of families).
Source: Observadora
