independent

Friday 25 April 2014

Housing costs overtake food spending for the first time

Picture posed. Thinkstock

FAMILIES are spending more on housing than on food for the first time ever.

A new report from the Central Statistics Office reveals that housing costs have soared by over 50pc in just five years as families battle with the legacy of the building boom.

It also shows that traditional families with children are the most squeezed as their average incomes have fallen by 5pc since 2005, whereas other types of households saw slight increases.

Overall, Irish households now spend 18pc of their money on housing, compared with 16pc on food, a dramatic shift since 2005 when only 12pc of our income went on keeping a roof over our heads.

The new Household Budget Survey provides a wealth of detail on how Irish people spent their money in 2009-2010 compared with earlier periods.

It shows we're living within our means and spending less on luxuries like drink and cigarettes but significantly more on necessities such as fuel and lighting.

Earnings

Although work earnings have fallen since 2005, social welfare payments soared, and average household income after tax rose by 5pc to €886 a week.

Average spending increased by 3pc in that time to €811 a week or €42,000 a year, with housing costs swallowing up €7,700 of that.

Mortgage holders are hardest hit, forking out over €13,000 a year for housing alone -- some €255 a week -- though they generally earn quite a bit more than average.

Our average food bill has fallen by 8pc since 2005 to €131 a week, as we cut costs and shop around for better value.

That means just €1 out of every €6 we spend now goes on groceries, the lowest level ever seen, and in contrast to the 1980s when it was €1 in €4.

But we've still got the taste for fattening food as takeaways, soft drinks, crisps, sweets, cakes and biscuits now account for a quarter of our food purchases.

Despite rising petrol prices we're now spending less on transport than we used to because we've lost our new car habit.

But surprisingly, holiday spending soared by 15pc since 2005, reaching almost €2,000 per household in 2010.

We spent an average of 23 nights on holidays, and 82pc of that was abroad, while the richest 10pc of families spent a whopping 53 nights away.

Households are living within their means again as we spent €811 of our average €886 weekly disposable income, suggesting we're saving the rest -- a situation that compares with the 1990s when we spent more than we earned.

However, people on lower incomes are still spending more than they earn -- which the CSO said could suggest some were dipping into their savings, borrowing money or earning extra unreported cash from nixers.

Retired people saw the biggest increase in weekly earnings with a 26pc increase between 2005 and 2010, while urban households fared better than rural ones, the study shows.

Single-person households also fared well with gross income up 16pc since 2005.

Irish Independent

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