Home rebuilding costs jumped 21% in the last year, surveyors say – The Irish Times

Rebuilding costs have jumped by more than a fifth over the past year, according to the Society of Chartered Surveyors in Ireland (SCSI).

This means homeowners are underinsured for their homes, should it be destroyed by fire or otherwise.

Figures show that the cost of rebuilding a standard three-bed semi-detached home has jumped between €42,000 and €56,000, depending on where the property is located in the state, since the last SCSI guide was published in April of last year.

Costs jumped sharply in the Northwest as the mica scandal put pressure on local contractors, driving up prices.

However, Dublin remains the most expensive place in the state to rebuild a home. Despite the massive increase, the Northwest remains significantly cheaper than other parts of the state.

The report is likely to be cited by mica activists in the Northwest to bolster their argument that construction costs are higher than those used as the basis for government reparations in an earlier report.

SCSI said the terms of reference used in that previous report, published in February, state that costs should be based on building regulations and standards prior to 2007, when insulation, mechanical and electrical specifications were lower.

However, it acknowledged that there had been “significant construction cost inflation” in the seven months that followed. The commission said the increase in the number of people buying and renovating real estate in the Northwest due to the growing trend of working from home was also a factor in increasing local construction costs.

The new data comes as 1,400 homeowners allegedly damaged by faulty mica blocks prepare to challenge a government compensation scheme in the Supreme Court.

Kevin Brady, president of the Professional Group of Quantity Surveyors at SCSI, said supply chain difficulties and increases in building materials prices have driven up prices across the state.

“This is a direct consequence of the war in Ukraine and leads to a sustained increase in the prices of energy-intensive materials such as concrete, aggregates, steel and paint.”

Besides increases in the price of building materials, Brady said, “the ongoing labor shortage is showing no sign of abating and is also driving up rebuilding costs.”

SCSI President Kevin James has warned that homeowners who are not adequately insured may eventually have to pay a portion of large sums out of their own pockets if they need to rebuild their homes.

Insurance amount

“When the sum insured is only 75 percent of the total cost of reinstatement, you will only get 75 percent of the agreed cost of reinstatement, whether the claim is made for partial replacement or total loss,” he said.

Where the cost of rebuilding the house is 360,000 euros but only secured for three-quarters of that, 270,000 euros – the homeowner will be left to finance a quarter of the bill, 90,000 euros, out of his own pocket, he said for example. Example.

“Similarly, if there is a partial loss, which costs 60,000 euros to repair, the insured party will receive only 45,000 euros and will have to provide a credit of 15,000 euros,” he warned. “This is something many homeowners may not realize.”

SCSI emphasizes that the numbers it produces are for “basic rebuild costs only”. This means that homeowners will need to allow more items such as garages, fitted kitchens, built-in wardrobes, and any special finishes or floors when considering insurance.

SCSI said the increase in the cost of rebuilding a property ranged from 14 per cent in Dublin to 26 per cent in the northwest, with an average of 21 per cent across the state.

Since the last guide was published 17 months ago, Brady said rebuilding costs have jumped an average of 29 percent. Figures published by the association show that the cost of returning some types of homes has risen by as much as 44 percent in that time.

The group, the professional body of quantity surveyors that specializes in construction costs, provides guidance for two- and three-bed terraced homes, three- and four-bed semi-detached homes, four-bed detached homes, and four-bed bungalows.

She said the specifications and designs used for the six types of homes have been updated this year, meaning that not all reported cost increases can be traced back to construction inflation.