The Role of Housing in Shaping the Transformation, Distribution and Financialisation of Wealth in Ireland

This thesis examines the relatively unexplored topic of Irish wealth and argues that housing wealth and prices are the key driver of wealth dynamics over time. Ireland represents a unique case study given the historical importance of land and homeownership in the country, which arises in part from its tumultuous history, the clear prominence of housing as the key form of wealth for households in recent decades, and its rapid development from a poor, closed and agrarian economy to an open and highly globalised economy. Collectively, these factors set it apart from the larger, historically wealthier economies typically focussed upon in the existing global literature on wealth accumulation and inequality. The thesis contains three research chapters that leverage new innovative datasets on Irish wealth to examine some of the key outstanding questions around the evolution of wealth in Ireland. The first examines the transformation of the composition of Irish wealth since 1950 and highlights the importance of housing and house price effects - and to a lesser extent land price effects - in driving changes in household and national wealth aggregates and wealth-to-income ratios. The second study demonstrates that the same house price effects have also resulted in rising housing wealth inequality in the past decade. While rising house prices grow the wealth of existing homeowners, they also amplify housing affordability challenges for non-owners – especially younger and lower-income households - meaning that accumulation of housing wealth has increasingly become concentration among the wealthiest 10% of households. Finally, the third research chapter examines the new phenomenon of institutional investment in housing (i.e. financialisation 2.0), highlighting the growing shift of wealth from households to institutions. Moreover, it demonstrates that this investment could have negative impacts on local housing market dynamics, amplify housing affordability challenges and thus indirectly contribute to rising housing wealth inequality. The findings of this thesis underscore the importance of placing housing and that the factors that affect it at the centre of the study of wealth. In particular, the extent to which house price effects determine wealth dynamics in financialised capitalism. This includes studying aggregate wealth levels, wealth-to-income ratios, trends in wealth inequality, and how all of these interact with the political economy of housing.