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It costs over €17,000 per year to run a house - just under half the average wage

People who took out a 90% mortgage this year are likely to pay out €11,000 per year.

Image: Shutterstock/Atstock Productions

THE COST OF owning and running a house in Ireland each year has jumped by more than €1,000 since 2018, according to new research from AA Ireland. 

The average homeowner in Ireland is now spending over €17,000 on owning and maintaining their house. That equates to about 43% of the current average national wage, according to figures released by AA Ireland today.

Every year, the AA analyses expenses related to owning and running a home, such as mortgage costs, property tax, heating and other bills.

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 €243,000 during the third quarter of 2018 to €269,000 in the third quarter of this year.

Capture Source: AA Ireland

Those who took out a 90% mortgage this year are likely to pay out €11,000 per annum – an increase of 9.45% on last year.

Speaking about the findings, Conor Faughnan, AA Director of Consumer Affairs, said: “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.

In fact, the increase in monthly mortgage repayments almost single-handedly accounts for the over €1,000 increase in home running costs that we have seen 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.”

Negative equity

While the AA bases its calculations on the expenses of a new buyer, there is also the so-called 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 was bought in 2007. That cohort currently pays €4,653.48 more per year on their mortgage repayments than people who purchased their homes in the third quarter of this year.

Capture Source: AA Ireland

The second single most expensive bill for homeowners is in relation to maintenance, repair and contingency funds.

The AA estimates that the average homeowner is likely to spend or set aside €1,246.35 each year to keep up with wear and tear. This figure equates to almost 7% of the overall estimated cost of owning and running a home.

Taking average usage figures, the AA estimates that homeowners will spend €815.72 (+3.79%) heating their three or four-bedroom home this year and a further €999.79 (-5.54%) on electricity.

Other costs included in the study were: home insurance (building and contents combined), calculated at about €570.95; telephone and broadband bills at €420; household appliances at €554.86; household cleaning products at €340.94; and domestic refuse collection at €300.72. 

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