Redevelopment costs have risen by more than a fifth in the past year, according to the Society of Chartered Surveyors in Ireland (SCSI).
This means that homeowners are almost certainly underinsured on their homes, should they be destroyed by fire or otherwise.
The figures show that the cost of rebuilding a standard three-bed house has increased by between €42,000 and €56,000, depending on where the property is located in the state, since the latest SCSI guide was published in April last year.
Costs have increased most strongly in the north-west, where the mica scandal has increased the pressure on local contractors, pushing prices higher.
However, Dublin remains the most expensive place in the state to rebuild a home. And despite its outsized growth, the Northwest is still noticeably cheaper than other parts of the state.
The report is likely to be cited by mica campaigners in the North West to bolster their argument that construction costs are higher than those used as the basis for government compensation in a previous report.
SCSI said the terms of reference used in the previous report, published in February, stipulated that costs would be based on building codes 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 intervening seven months. An increase in people buying and renovating properties in the Northwest due to the growing trend of working from home was also a factor pushing up local construction costs, SCSI said.
The new details come as 1,400 homeowners allegedly affected by faulty mica blocks prepare a High Court challenge to a government compensation scheme.
SCSI quantity surveyors chairman Kevin Brady said supply chain difficulties and building material price increases had pushed up prices across the state.
“This is a direct result of the war in Ukraine and is leading to a sustained increase in the price of energy-intensive materials such as concrete, aggregate, steel and paint.”
Alongside the price increases for building materials, Brady said, “ongoing labor shortages show no sign of abating and are also driving up rebuilding costs”.
The president of SCSI, Kevin James, warned that homeowners who were not adequately insured could end up having to pay some significant sums out of pocket if they needed to rebuild their homes.
“Where the sum assured is only 75 per cent of the total restoration cost, you will only get 75 per cent of the agreed restoration cost, whether the claim is for partial compensation or total loss,” he said.
Where a home cost €360,000 to rebuild but had only been insured for three quarters of that, €270,000 – the home owner would have to finance a quarter of the bill, €90,000, out of their own pocket, he said by way of example .
“Similarly, if there is a partial loss, costing €60,000 to repair, the insured party would only receive €45,000 and would have to provide the balance of €15,000,” he warned. “This is something many homeowners may not be aware of.”
SCSI stresses that the figures it produces are for “base rebuild costs only”. This means homeowners would need to allow more for items such as garages, kitchens, fitted wardrobes and any special finishes or flooring when considering insurance.
The SCSI said the increase in the cost of redeveloping a property ranged from 14 per cent in Dublin to 26 per cent in the North West, with the average across the state at 21 per cent.
Since the last guide was published 17 months ago, Brady said remodeling costs had increased by an average of 29 percent. Figures published by the society show that the cost of reintroducing some house types has increased by as much as 44 per cent over that time.
The group, the professional body for quantity surveyors specializing in construction costs, provides guidance for two and three bed terraced houses, three and four bed semi-detached houses, four bed detached houses and four bed bungalows.
It said the specifications and designs used for the six house types had been updated this year, meaning not all reported cost increases could be attributed to construction inflation.
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