AA Ireland. Report Highlights 2.47% Increase In Annual Cost Of Running A Home
After dropping for the first time in four years in 2015, the annual cost of owning and maintaining a family home has risen again to €16,611.14 – equating to about 45.39 per cent of the current average Irish national wage, according to figures issued today by AA Home Insurance.
The AA carries out a detailed calculation each year which looks at the total cost of owning a house and subsequently running one in Ireland. Mortgage and property tax are calculated based on the current average property price. All other expenditure – from broadband to heating, to the cost of domestic appliances – is researched and calculated according to prices as of October 2016.
The increase in the cost of running a home comes following a rise in the national average price of a second hand home in Ireland. Values increased from €205,000 during the third quarter of last year to €215,000 in the same period of this year.
Those who took out a 90 percent mortgage this year are likely to pay €9,847.48 per annum – an increase of 4.57% on last year.
“The rise in property prices is the biggest change to the AA figures this year but the consumer did make some gains on energy and heating costs.” Says Director of Consumer Affairs Conor Faughnan. “Prices rose for items like home insurance, broadband and bin charges.”
While the AA bases its calculations on those of a new buyer, there is also the ‘negative equity generation’ – homeowners who bought their house at the peak of the boom. The AA gives figures for that group too, assuming the house is bought in 2007. That group currently pays €5,330.47 more on their mortgage repayments than their counterparts who purchased their homes in the third quarter of this year.
“Those who bought property at its 2007 peak paid about a third more than the current value and that large group of citizens are still carrying a huge burden. It is not just that they can find it difficult to move on because of the equity issue; their monthly payments are so high that they would need an extra €10,000 per annum in salary just to be in the same situation as someone who bought their house this year.”
Maintenance, repair and contingency funds is the second single most expensive bill for Irish householders and is down by a further 3 percent. The AA estimates that the average homeowner is likely to spend or set aside €1,240.63 each year to keep up with wear and tear. This figure equates to almost 8 percent of the overall estimated cost of owning and running a home.
Taking annual average usage figures of 15,500 kWh and 5,300 kWh for a three or four bedroom detached house respectively, the AA estimates that the average homeowner will spend €974.86 (-1.43 percent) heating their home this year and a further €1,082.48 (-3.13 percent) on electricity.
Off-setting this year-on-year decrease for both bills is an increase in gas pipeline supplies and strong wind generation which for the month of September accounted for 17 percent of the total electricity generation in Ireland.
Among the variables that remained the same as last year were television licence costs at €160, water charges at €260, property tax at €405, and AA Home Membership at €83.88.
Other costs included in the AA Home Insurance study were: i) home insurance (building and contents combined) which is calculated at about €538.12, ii) telephone and broadband bills at €515, iii)household appliances at €538.46, iv) household cleaning products at €300.23, v) domestic refuse collection at €315.