Cost of rebuilding a home rises by 12% in the past year

Rebuild homes have fallen significantly in the past year from a precious 21%, the SCSI reports 

Chartered Quantity Surveyor Kevin Brady said the continuing increase in rebuild costs is a direct result of construction labour shortages across the sector combined with high levels of demand for builders. Pic: Larry Cummins

National average re-build costs, including demolition and site clearance, have increased by an average of 12% over the past 12 months, according to the latest House Rebuilding Guide published by the Society of Chartered Surveyors Ireland (SCSI).

That is down significantly from the 21% increase recorded in the previous 12 months.

In the majority of regions, average costs have increased by 12% to 13%. Last year, the increases ranged from a low of 14% in Dublin to a high of 26% in the North-West.

However, the guide finds notable differences in the increase depending on house type even within the same region, with increases ranging from a low of 8% for a three-bedroom terraced house in Limerick to 14% for a semi-detached or detached house.

Chartered Quantity Surveyor Kevin Brady said the continuing increase in rebuild costs is a direct result of construction labour shortages across the sector combined with high levels of demand for builders.

“Overall, the construction market is extremely busy, and this means it can be difficult to source labour or subcontractors for any type of build, particularly electrical, plumbing and heating."

"Rebuilding a property is not the same as building new houses on a green field site. It requires specialist skills relating to demolition and supporting neighbouring properties." 

"Rebuild projects can also present access challenges. As a result, it is almost a niche market and there can be difficulty sourcing contractors to take on rebuild projects. This will naturally be reflected in tender prices for such projects.”

Price disparities

While price increases may have moderated, Dublin still has the highest rebuild costs, while the North-West is among the lowest.

According to the SCSI, the minimum base cost of rebuilding a 3-bed semi, the most common house type in Dublin is €303,212 (98sqm x €3,094) while the minimum base cost of rebuilding a similar house in the North-West is €225,204 (98sqm x €2,298) – a difference of just over €78,000.

Insurance issues have also been noted by the SCSI, with President, Enda McGuane adding that two issues come up regularly regarding insurance, the first being consumers mixing up valuations with rebuilding costs and the second being homeowners not fully appreciating the dangers of underinsurance.

“A market valuation is the expected amount another person would pay for your property, ie the sale price, if it was placed on the open market. The rebuilding cost is the cost or price of building or replacing the dwelling," Mr McGuane said.

"The other key issue homeowners often don’t realise is that if they are not adequately insured, they may be penalised under their policy by having to pay a certain proportion of the reinstatement costs out of their own pocket."