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House rebuilding costs increase by average of 6% nationally over last 12 months

The latest Guide to House Rebuilding Costs published by the Society of Chartered Surveyors Ireland (SCSI) shows that national average re-build costs have increased by an average of 6% over the past 12 months.

The Guide to House Rebuilding Costs, which is used by homeowners to calculate the rebuilding costs of their home for insurance purposes, is published annually by the SCSI.

The Guide was launched at the SCSI’s Property Insight 2019 conference which is taking place today (Tuesday) at Killashee House in Kildare and which is being attended by over 170 chartered surveyors and estate agents from all over the country.

Micheál Mahon, Vice President of the SCSI said the main reason the figures were rising was due to the increase in labour rates due to the shortage of construction workers, the impact of new building regulations and the costs associated with disposing of demolition waste.

The construction sector is experiencing high levels of activity and this increase is having an inflationary effect on construction prices. There are simply not enough construction workers to meet demand and as a result wage costs are rising. More recently, changes to ventilation requirements for new builds came into effect this year and while they will help reduce heating costs in the long run, this has contributed to the rise in building costs. Thirdly, the costs of disposing of building waste have continued to rise” Mr Mahon said

Interestingly while rebuild costs are up by 8% in Limerick, Cork and Galway over the last 12 months, the rise in Dublin was a more moderate 5%. The Society believes this is linked to increased competition in the capital while it also reflects what’s happening in the wider property market with prices falling in Dublin and still rising in the regions. 

Fig 1 The average minimum rebuilding costs for a standard 3-bedroom 1023 sq. ft (95sq.m) semi-detached house around the country are as follows:

Base Rebuild Costs                      Rounded
1023 x €203   =   €207,669      -      €208K
1023 x €161   =  €164,703      -       €165K
1023 x €159   =  €162,657      -       €163K
1023 x €148   =  €151,404      -       €151K
1023 x €156   =     €159,588      -    €160K
1023 x €127   =   €129,921      -       €130K
 1023 x €160   =  €163,680      -       €164K

*These are the base rebuild costs only. Additional items such as kitchen, built in wardrobes, floor finishes, and a garage, if the property has one, also need to be factored in. The rebuild costs of such items will vary from house to house.

While price increases may have moderated in Dublin, not surprisingly the capital still has the highest rebuild costs. According to the figures the cost of rebuilding a 3-bed semi in Dublin, is €238K, while the cost of rebuilding a similar house in the North West of the country is €160K, a difference of €78K. Put another way the cost of rebuilding a 3-bed semi in Dublin is €203 per sq. ft versus €127 per sq. ft in the North West. (€2181 per sq. m v €1368 per sq. m)

Micheál Mahon says that given the sums involved homeowners need to ensure their homes are adequately insured. 

The reality of the situation is that if the rebuild cost of your home is €360K and you only have it insured for €270K, in the event of a catastrophic event such as a fire, you will be facing a shortfall of €90K. However, what a lot of homeowners don’t realise is that if in that situation there was a partial loss, which cost €60K to repair, the insured party would only receive €45K and face a shortfall of €15K. This is because the homeowner in question has only insured their property to three quarters of its rebuilding cost.”

That is why it is important for homeowners to put aside five or ten minutes, to check our easy to use rebuild calculator and to ensure the reinstatement costs required on their home insurance premiums are adequate and fully in line with current figures.”

With rebuild costs rising it is possible consumers may well face pro rata increases on their home insurance premiums. We would advise homeowners to shop around to ensure they are getting the best value” Mr Mahon added.

Valuation v rebuilding costs

The SCSI said that its very important that homeowners understand the difference between a valuation and rebuilding costs. A market valuation is the expected amount another person would pay for your property if it was placed on the open market.

The rebuilding costs are associated with the cost of building or replacing the dwelling.  The SCSI says these figures can be very different so it’s important that the SCSI calculator is not used for valuation purposes.

A House Rebuilding Calculator and the 2019 Guide to House Rebuilding Costs is available free of charge.