The cost of owning and running an average Irish home is €15,655.49, up by 2% since last year, according to a detailed analysis by AA Home Insurance. That figure includes the cost of a mortgage of 92% of the average house price of €170,000. It also includes the costs of heating, phone and broadband, kitchen appliances, insurance, TV licence and bin charges. It also includes the Household Tax which has increased from a flat €100 last year to an average of €315 and is of course set to double next year when it applies for the full year.
“The figures are scary when you itemize everything.” Says AA Director of Consumer Affairs Conor Faughnan. “Each of the items that we pay for are familiar but when you add them all up it is small wonder that so many households are struggling financially.”
AA Home Maintenance Calculations
Notwithstanding a much commented upon rise in some Dublin house prices, the price of an average home in Ireland is now €170,000 compared to €172,000 in 2012. The AA calculates the mortgage cost based on a basket of sample mortgage rates. Added to that are the prices of all the elements that are necessary to maintain the home. The figure equates to 44% of the average current Irish annual wage in Ireland of €36,012.
Of course taking today’s average house price does not reflect the true burden on those who bought at the height of the boom. For someone who bought at the average house price in 2007 the cost of running a home is 29% higher at €21,940.
“The group of people who bought at the top clearly carry a much heavier burden.” Says Faughnan. “This continues to be a major social concern. For example, we know that many people are cutting back on things like Home Insurance because the family budget just does not add up.”
The AA calculations show a huge increase in property tax as it moves from the introductory flat rate of €100 to a six-month charge based on the property valuation. That figure of €315 will double next year as the tax is charged for a full year. The increase in the average price of a phone and broadband package from €357 to €419 also contributed. Meanwhile, digital television packages also increased on average from €285 to €333. All of these combined had a part to play in the 2% increase in the cost of living for 2013.
There were other factors as well. Heating your home costs more in 2013 as gas prices have risen on average by €90 per annum for the average usage figure of 20,000 kWh. The news that there will be no increase in home-heating cost in the Budget for 2014, can only come as a welcome surprise. Electricity bills hardly changed in 2013 with only a marginal decrease of €18 for the average usage of 5,300 kWh.
Competitiveness in the insurance market has had an effect on the overall price of home insurance (building and contents combined) in 2013 which comes in at €484. This represents a 3.3% fall in home insurance costs for 2013.
“There is very strong competition in Home Insurance right now.” Says Faughnan. “Insurers are all feeling the effect on their businesses of many home-owners choosing to cut back on insurance or even do away with it altogether. On the bright side, that gives the buyer some power. Don’t be afraid to push your insurer for the best deal and don’t be reluctant to change provider if it is in your best interests.”
There is some good news in the AA analysis. The cost of household appliances has shown the biggest drop with a decrease of 24% since 2012.
“Everything from TVs to toasters got cheaper.” Says Faughnan. “Again sellers are really desperate for business and the consumer can get good deals. Less positively, household cleaning products have risen by about 4% since 2012.”
Bin charges remain a significant expenditure for home owners in Ireland, although the price is down since 2012, costing on average €264, a 9% drop. Prices do however vary greatly between counties. In Co Leitrim you can be expected to pay as much as €428, while the lowest price quoted for bin collection was in Dublin 14, 16 and 18 where costs can be as low as €148.