Household wealth nearly doubles but rich-poor gap persists: Central Bank study

Household wealth has exploded in recent years, but overall wealth remains unevenly distributed among different groups, a new Central Bank study has found.

The findings were presented during the launch of the fifth edition of the Household Finance and Consumption Survey (HFCS), a study held every three years across Europe.

Among other things, the study tallies up households’ total wealth, including their income, property and other assets such as vehicles and investments.

The study shows that the median net wealth of households rose from €194,000 in 2010 to over €376,000 in 2023, almost doubling over the span of 13 years.

Median net wealth has risen particularly sharply in recent years, increasing by over €100,000 (or 37.5%) since 2021 alone, the survey shows.

Wealth disparity persists

However, the study shows that different income groups are experiencing this growth very differently.

The richest 10 per cent hold 71 times more wealth than those in the poorest ten per cent, the survey suggests.

Meanwhile, the wealthiest 20% have seen their household median wealth nearly double, rising from €617,000 in 2010 to over €1.1 million in 2023. By contrast, median wealth among the bottom 20 per cent rose by just €3,000 during the same period.

Home ownership rates still high

Arguably, the largest factor in a household’s net wealth remains property ownership, the study shows, describing homeowners as “significantly wealthier than renters, with a median net wealth of €477,500 compared to just €21,000”.

This is reflected in the study’s findings on wealth disparity across Malta’s different regions, the authors suggest.

Gozo and the western region are generally the wealthiest areas in the country, ranking highest for net wealth and total assets. Meanwhile, the harbour areas, where the proportion of people renting is higher, registered the lowest median net wealth.

Home ownership rates more broadly remain high and in line with figures first presented in 2010.

In total, 76% of households own their main residence, the study shows. Of those, over half (56%) own the property outright, while 20% are paying off a mortgage.

The figures are higher once foreign residents are excluded from the data, with just over 83% of Maltese nationals owning their house either outright (61%) or with the help of a mortgage (22%).

However, mortgages appear to be becoming more commonplace than they once were.

In 2010, just 13% of homeowners held a mortgage. This has since risen to over 20%.

Meanwhile, homeowners have seen the value of their homes almost double since 2010, rising from €180,000 to €350,000, driving up their overall net wealth.

Foreign nationals far poorer than Maltese

Foreign nationals appear to be bearing the brunt of things, the study suggests.

More than four out of every five foreigners in Malta (82%) are renters, compared to just 17% of Maltese, resulting in them having a far lower net wealth.

Some 83% of foreign nationals fall below Malta’s median net wealth, a far cry from the 31% of Maltese.

On the whole, foreigners hold a median net wealth of just under €23,000, compared to almost €400,000 for Maltese.