The surge in real estate prices, and to a lesser extent that of the stock market, have made the total wealth of households jump last year. This is what emerges from the latest survey on national economic wealth published by INSEE on Wednesday. Overall, the gross wealth (excluding debts) of households* reached 16,530 billion euros at the end of 2021, an increase of 7.5% over one year (against +6.3% between 2019 and 2020). A very clear acceleration compared to the average increase observed over the period 2009-2019 (+3.4% per year).
In detail, the stone in the broad sense weighs 9068 billion euros for the households. That is 55% of their assets. Insee distinguishes here housing (4228 billion euros) and other buildings (175 billion euros) from built land (4665 billion euros). And it is essentially the estimated price of land that is exploding. While the real estate part of the heritage of the households increases of 7,8 % between the end of 2020 and the end of 2021, "this dynamics is mainly the fact of the built lands (+12,0 % after +10,8 %), while the value of the residences (except lands) grows more moderately (+3,7 % on the last two years)", underlines the institute.
This development is in line with the surge in real estate prices last year. In the former, housing prices in France jumped by 7.1% between the fourth quarter of 2020 and the fourth quarter of 2021, according to data from notaries. After the first confinement in 2020, and while the rates of real estate loans were still beating records down, households have multiplied the real estate projects. We have also seen a rush on houses and a new attractiveness of medium-sized cities.
But the spectacular rise in the stock market has also benefited households holding financial securities. Shares and units in investment funds reached 1891 billion euros at the end of 2021 (+13.3% over one year, compared with only +1.8% between 2019 and 2020). By way of comparison, the CAC 40 index rose by 29% in 2021, its best performance since 1999 and its sixth highest increase since its creation.
Another important element in household assets is life insurance. At the end of December, it weighed 2161 billion euros. The increase in this amount is nevertheless relatively small (+1.2% year-on-year) because, with the low interest rates of last year, the performance of these investments was clearly less attractive than other asset classes.
"The outstanding amount in cash and deposits decelerates (+6.4% after +9.9%): while the confinements of 2020 had led to an exceptional drop in consumption and an accumulation of savings on current accounts, the decline in intensity of the Covid-19 pandemic is reflected in a gradual return to normal in 2021," Insee also states. These cash savings thus amounted to 1934 billion euros at the end of 2021.
Opposite these assets, households show liabilities of 1930 billion euros (mainly loans for 1665 billion euros), up by 4.2% compared to 2020. This brings their assets net of debts to 14,600 billion euros. A capital that will certainly be further abused in 2022, between inflation, rising interest rates and the fall of the equity markets that has been observed since January.
