The level of Irish household debt fell over the final three months of 2012 due, in part, to €400m worth of loans being written down by financial institutions.

The Central Bank's latest financial accounts, for the final quarter of last year, show household debt fell by €2.9 billion during the period to €173.9 billion.

The 1.7% fall in debt levels was the biggest quarterly decline since the second quarter of 2010. Repayments of €1.8 billion were made between October and December 2012 by Irish households.

The reduction in household indebtedness means the ratio of debt to disposable income, which is considered a key measure of how sustainable the debt burden is, fell to  201.6%. 

The debt sustainability ratio peaked at just over 221% in 2010.

Household debt in Ireland is still high by international standards. The total figure of €173.9 billion equates to €37,928 on a per capita basis.