Through the roof: the cost of keeping a household going
The cost of running an Irish household is up on last year. And that’s before you start eating
It costs an estimated €49,000 per annum to run the average Irish household
While a net income of just under €50,000 might sound like a lot of cash, it can be burned through very quickly by families trying to keep the wheels on the wagon.
When all household bills are totted up, including food, mortgage payments, utilities, insurance and motoring costs – but excluding luxuries such as holidays or school fees – the cost of living for those who bought modest homes during the boom years now nudges €49,000, according to independent figures compiled by this newspaper and the second annual cost-of-living survey published this morning by AA Home Insurance.
According to the AA figures, the average annual cost of owning and maintaining a home in Ireland, based on today’s house prices, is €15,655 but if you are one of the negative-equity generation and bought a home at the height of the boom in 2007, the story is much bleaker, and you will have to find about €22,133 after tax every year to keep things going.
This is a 2 per cent increase on last year. And the AA’s figures, while comprehensive, do not include food, clothes, running a car, entertainment or many other expenses considered normal by most people.
A homeowner who buys a house today at the current average market price of €170,000 will spend just over €9,000 on mortgage repayments next year, according to the latest research, but someone who bought in 2007 and paid the then average price of €344,000 with a 92 per cent mortgage will need to find €15,700.
The AA has identified repair, maintenance and contingency costs as the next biggest single cost faced by Irish homeowners after mortgage repayments. It says the average homeowner will need to spend or set aside €1,275 over the next 12 months to keep up with wear and tear.
Heating and electricity bills come to €2,307 for a typical three- or four-bedroom detached house compared with €2,234 last year.
Other costs included in the AA study are home insurance (building and contents combined), which is down from €500 to €483 this year; telephone and broadband, which is up to €418 from €357; bin charges, down from €289 to €264; and a basic digital TV package, which is now €333, compared with €285 last year.
The AA has also factored in the cost of repair and replacement of household appliances, and it is set this year at €505, compared with €662.03 last year. The estimated cost for cleaning products this year is €312, up slightly on last year’s figure. Also among the fixed charges in the AA’s study are TV licences, which are steady at €160.
There has been a big increase in property tax, with the household charge of €100 being supplanted by an average Local Property Tax of €315, to which the AA has added its Home Rescue policy of €88 – obviously, unlike the tax, you don’t have to pay it.
On a more positive note, the AA survey points to ways in which people can save. It involves shopping around. According to AA, there is nearly €200 difference between the annual cost of gas with the dearest provider (Bord Gáis Energy’s standard rate), and the cheapest (Flogas) when you pay by direct debit.
The AA also worked out the cost of 10 appliances based on the average price in three retailers – Harvey Norman, Power City and DID – and across three brands. A vacuum cleaner will cost you an average of €42.21 a year to run, up marginally on 2012. A dishwasher will set you back €71.86, again a small increase on last year.