Rebuilding costs have jumped by more than a fifth over the past year, according to the Society of Chartered Surveyors in Ireland (SCSI).
That means 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 semi-detached home have jumped by between €42,000 and €56,000, depending on where the property is located the State, since the last SCSI guide was published in April last year.
Costs have jumped most sharply in the northwest where the mica scandal has increased pressure on local contractors, pushing prices higher.
However, Dublin remains the most expensive place in the State in which to rebuild a home. And, despite its outsized increase, the northwest remains noticeably cheaper than other parts of the State.
The report is likely to be cited by mica campaigners in the northwest to bolster their argument that construction costs are higher than those used as the basis for Government compensation in a previous report.
The SCSI said the terms of reference used in that earlier report, published in February, stipulated that costs were to be based on pre-2007 building regulations and standards, when insulation, mechanical and electrical specifications were lower.
However, it acknowledged there had been “significant construction cost inflation” in the intervening seven months. An increase in people purchasing and renovating properties in the northwest due to the growing trend of working from home was also a factor pushing up local construction costs, the SCSI said.
[ More than 1,100 legal actions now lodged over properties affected by micaOpens in new window ]
The new data comes as 1,400 homeowners allegedly affected by defective mica blocks are preparing a High Court challenge to a Government compensation scheme.
Kevin Brady, chairman of the quantity surveyors professional group in the SCSI, said supply chain difficulties and increases in the price of building materials 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, aggregates, steel and paint.”
Alongside increases in building materials prices, Mr Brady said, “ongoing labour shortages show no sign of abating and are also pushing up rebuild costs”.
The president of the SCSI, Kevin James, warned that homeowners who were not adequately insured may end up having to pay part of substantial sums out of their own pocket if they needed to rebuild their homes.
Insured sum
“Where the insured sum is only 75 per cent of the total reinstatement cost, you will only receive 75 per cent of the agreed cost of reinstatement, whether the claim is made for partial replacement 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 homeowner would be left to fund 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, which costs €60,000 to repair, the insured party would only receive €45,000 and would have to provide the balance of €15,000,” he cautioned. “This is something many homeowners may not be aware of.”
The SCSI stresses that the figures it produces are for “base rebuild costs only”. That means homeowners would need to allow more for items such as garages, fitted kitchens, built in wardrobes and any special finishings or floors when considering insurance.
The 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 the average across the State of 21 per cent.
Since the last guide had been published 17 months ago, Mr Brady said rebuild costs had jumped by an average of 29 per cent. Figures published by the society show the cost of reinstating certain house types has surged by as much as 44 per cent in that time.
The group, the professional body for quantity surveyors who specialise in construction costs, provides guidance for two- and three-bed terraced town houses, three- and four-bed semi-detached homes, four-bed detached homes and four-bed bungalows.
It said the specifications and designs used for the six house types had been updated this year, which meant that not all the reported increases in cost could be attributed to construction inflation.
