A raft of everyday household expenses, including private landlord rents, public transport, and college registration fees, are soaring above the price levels reached during the boom years, official figures show.
Analysts say that a detailed breakdown of consumer price figures show that the trend in the past year of price decreases for some goods is masking huge price rises of everyday items across the economy. As a result, many prices are now well above levels recorded in 2006.
Headline CSO figures on consumer prices were published yesterday and showed the annual price index tumbled by 0.7% in April, as the costs of buying airline tickets, cars, meat and vegetables, clothing, and furniture all fell.
However, a detailed study by the Irish Examiner of the items that make up the cost of living reveals that the overall story of deflation is giving a misleading picture of the real costs facing families.
“It is not the fault of the Irish figures, but the national indices in most countries give a misleading picture of what is happening with everyday prices,” said Alan McQuaid, the chief economist at Merrion Capital.
“The consumer price indices showing that prices are deflating do not reflect the the real cost of living and the true picture for many households.”
An analysis of the consumer price figures reveal that a series of costs, from private rents to education fees, continue to soar.
Private rents have climbed by 8.7% in the past year and are now about 25% above their 2011 levels. At the same time mortgage interest costs, which exclude the capital costs of paying home loans, have fallen 8.3% in the past year and are up to a third cheaper than four years ago.
Rents are rising at their fastest annual rates since the boom years of 2005 and 2006, figures reveal.
The CSO samples estate agents and compares similar properties each month. The figures show that rents started recording annual increases of 3% in 2012 and 2013 and have now accelerated again by 8% or 9% in each of the last two years.
The cost of third-level education, including increases in registration fees, climbed by almost 7% in the year to April and are now 21% higher than 2011 levels.
Health insurance premiums fell by 3% in the past year, but they remain over 33% more expensive than in 2011, while car insurance costs have climbed by 16% in the past year.
Airline and ferry passenger tickets fell in the year to April, but public transport costs continue to rise sharply. Bus fares rose by 2.7% in the past year and are now over 20% more expensive than in 2011. The figures show train fares have risen 4.7% in the year and are now 17% more expensive than during 2011.
Accommodation and hotel services costs rose by an annual rate of 8% in both 2005 and 2006 and then slumped by as much as 16% in 2009. Accommodation costs, however, have now started to increase rapidly, posting an increase of 8.9% in April, the highest increase since early 2007, the figures show.
The CSO is currently carrying out a major household budget survey which it will use to determine the items that will be sampled in the future in the consumer prices index. The spending of households is also updated on an annual basis.
Article Source: http://tinyurl.com/kbwqb42