Cost of running a typical home soars to €17k a year due to rise in house prices
The cost of running a typical home has shot up to over €17,000 a year, despite the current low rate of inflation.
It now costs an extra €1,000 a year to own and maintain a family home, with the higher expense mainly down to higher prices for buying a home.
This means the average homeowner is spending €17,393 a year to run and maintain their home, according to an analysis from AA Home Insurance.
Higher costs for homeowners have emerged despite the annual rate of inflation falling to 0.7pc in October from 0.9pc the previous month.
The latest figure means it costs 43pc of the current average Irish national wage.
Almost all of the increased cost of running a home is down to the higher price of buying a second-hand home, which has pushed up mortgage costs.
Average property asking prices rose by €26,000 over the past year to €243,000.
AA calculated that this means a couple taking out a 90pc mortgage will end up making annual mortgage repayments of €11,000 a year. This is up almost €1,000.
Central Bank figures last week showed that average mortgage interest rates in this country are twice the average level for the eurozone.
This means typical new buyers here with a €300,000 mortgage over 30 years are paying €235 more a month than the average for the currency bloc.
This works out at €85,000 over the lifetime of the mortgage.
AA Ireland's Conor Faughnan said the higher mortgage costs wiped out the fall in costs for householders of electricity, broadband and TV charges.
"While we're still significantly off the peaks seen during the Celtic Tiger, house prices have continued to surge in the past 12 months, representing a major issue for both those looking to acquire their first home and those trying to meet their monthly mortgage repayments."
Mr Faughnan said the increase in monthly mortgage repayments almost single-handedly accounts for the over €1,000 increase in home running costs this year.
"The good news is that many of the other increases seen in home running costs are offset by drops in the cost of electricity and broadband/TV charges, meaning if you were fortunate enough to purchase your home when prices were lower, your financial situation is largely unchanged."
He said the higher costs for running a home will be a major concern for families across the country.
"This is particularly true for those trying to get their foot on the property ladder, who are facing many of the costs associated with home ownership, while also trying to meet rental payments and save for a deposit," Mr Faughnan said.
AA Ireland said home running costs have gone up by €2,000 over the last five years, while house prices have increased by over €60,000.
"This is certainly a worrying and unsustainable trend and highlights the need for urgent action by Government and local councils to ensure the housing stock isn't outstripped by demand," Mr Faughnan said.