House rebuild costs rise sharply in West
The costs for rebuilding houses in the North West have shot up in the past year by 10%. Picture: Rui Vieira/PA Wire
The latest House Rebuilding Guide, published by the Society of Chartered Surveyors Ireland (SCSI), shows that national average re-build costs, which include demolition and site clearance, have increased by an average of 6.2% over the past 12 months.
In the North West region, which includes Mayo and Sligo, house rebuild costs increased by 10%, the highest rate of increase in the country, although the region still has the lowest rebuild costs. 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.
“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.”
This year’s guide shows that increases in rebuild costs range from 3% in Dublin to 10% in the North-West. Although Dublin recorded the lowest increase, the capital has the highest rebuild costs while the North-West, which recorded the biggest increase, has the lowest.
This year three discernible groups emerged across the regions. In Dublin and Galway rebuild costs increased by 3% and 4%, in Limerick and Waterford the figures were 5% and 6% respectively while at the higher end the increases ranged from 8% in Cork and the North East to 10% in the North West.
Kevin Brady says the main reason for regional variations are differences in demand for builders and tradespeople.
“Higher increases were reported in Dublin some years back and it clearly has the highest rebuild costs now. This probably explains why the rate of increase there is somewhat lower, but demand for builders in Dublin and the commuter belt remains very high.
"Cork has experienced a boost in activity over the past two years and that is reflected in higher rates there. Similarly, the North East is experiencing significant development and the increased pressure on labour and availability of builders has we believe resulted in an increase in rates in this region also. Again, in the North West we are seeing increased market activity and continuing labour shortages with many builders and trades people pursuing the higher rates which are on offer in other locations.”
While price increases may have moderated, Dublin, not surprisingly, still has the highest rebuild costs, while the North-West has the lowest.
According to these figures, the minimum base cost of rebuilding a 3-bed semi, the most common house type in the country, 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. The 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 i.e. a fire, they are covered under their insurance policy when reinstating or rebuilding," said Kevin Brady. "For example, rebuild costs for a 3-bed-semi have increased over the past 12 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 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. Some insurers are now auto adjusting insurance policies on an annual basis and homeowners need to satisfy themselves that any quotes they receive are aligned with current rebuild rates.” Mr Brady said.
The SCSI points out that the rebuild figures are based on estate type houses and people with one-off homes or period properties are advised to contact their local chartered surveyor. A list of chartered quantity and building surveyors who carry out these assessments is also available on the SCSI website.
