Cost of house rebuilding on the up
The latest House Rebuilding Guide published by the Society of Chartered Surveyors Ireland shows that national average re-build costs, which include demolition and site clearance, have increased by an average of 6.2% over the past twelve months.
In Galway, which has a mid-table ranking among the seven regions where rebuild rates were measured, the average increase was 4%.
The SCSI’s House Rebuilding Guide, which has been published annually since 1989, is used by homeowners to calculate the rebuilding costs of their home for house insurance purposes.
While welcoming a moderation in the rate of increase – last year’s increase was 12% – Chartered Quantity Surveyor Kevin Brady said labour costs and skills shortages are continuing to drive rebuild costs.
“Due to covid, the war in Ukraine, high energy prices and supply chain issues the construction market experienced significant volatility over the last five years. The resolution of some shortages and supply chain issues has led to the cost of some materials moderating – the price of insulation, timber and paint for example have generally settled down,” he said.
“However, we are continuing to see increased costs in labour intensive tasks such as demolition and disposal of waste material while skill shortages across plumbing, electrical, heating and other trades are also contributing to increased costs.
“SCSI members are saying the demand for builders throughout the country remains at an all-time high and this is also a contributory factor to the increases we are seeing in this year’s figures.
“The introduction of the concrete levy has increased the cost of pre-cast and pouring concrete while the introduction of two new levies on waste and disposal in September is likely to increase costs going forward.”
Dublin still has the highest rebuild costs, while the North-West has the lowest.
According to these figures the minimum base cost of rebuilding a three-bed semi, the most common house type in the county is €312,620 in Dublin (98sqm x €3,190) while the minimum base cost of rebuilding a similar house in the North-West, is €247,744 (98sqm x €2,528) – a difference of close to €65,000.
In Galway the figure is €269,500.
SCSI is urging homeowners to take the time to ascertain the correct reinstatement cost based on house type and location.
“Homeowners need to ensure their house is adequately insured so that in the event of a total or partial loss situation – as in, a fire – they are covered under their insurance policy when reinstating or rebuilding,” said Mr Brady.
“For example, rebuild costs for a three-bed-semi, the most common house type in the country have increased over the past twelve months from €9,400 to over €22,500 depending on where you live.”
“While these increases are significant it does not necessarily mean premiums will increase on a pro-rata basis and homeowners are advised to shop around when seeking insurance cover for their homes.
“It’s really important for Galway homeowners to put aside ten minutes to use the SCSI Home Rebuild Calculator, which is free – to get an accurate reinstatement figure and ensure their home insurance is up to date. If it’s not they need to contact their home insurer,” Mr Brady added.