Household debt is now at its lowest level since 2005, and is over 30pc lower than its 2008 peak, according to the latest accounts from the Central Bank of Ireland (CBI).
During the three months to 30 June, household debt fell by €0.9bn to €141.7bn, which equates to 141.6pc of disposable income.
Meanwhile household investment in deposits was €1bn in the three months to 30 June 2017, its highest level since mid-2008.
Despite this, Irish households remain the fourth most indebted in the European Union behind Denmark, the Netherlands, and Sweden.
The net worth of households has now risen by almost 60pc since 2012 to €686.3bn, as increasing property prices increase the value of houses.
The domestic economy continued to be a net borrower in the three month period, with the level of net borrowing rising to €4.7bn.
This was largely attributed to non-financial corporations borrowing more heavily. However it was offset slightly by government borrowing falling by €0.1bn, and an increase in net lending of households and financial corporations of €0.3bn and €0.7bn respectively.
Private sector debt as a proportion of gross domestic product fell by 17.2 percentage points over the quarter to stand at 265.3pc. This was its lowest level since the beginning of the financial crisis.
Meanwhile Government debt rose by €2.4bn to €232.3bn during the three month period, this was primarily due to a €3bn increase in government issued debt securities, which was offset by a €0.7bn reduction in government loan liabilities.
The net financial wealth of government increased by €2.5bn over the quarter, as government assets increased faster than liabilities.
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