Labour costs, competition for skills between construction industry subsectors, and new Government levies have continued to drive increases in home rebuild prices over the past 12 months, the Society of Chartered Surveyors Ireland (SCSI) has said.
While the rate of increase in rebuild costs, which include demolition works and site clearance, has declined dramatically since 2023, inflation in this area of the construction industry is much higher than across the sector generally.
Rebuild costs have jumped by 7 per cent over the past 12 months, SCSI said on Tuesday, up from 6 per cent last year but down from 12 per cent in 2023.
The minimum base cost of rebuilding a typical three-bedroom semidetached house, one of the most common types of home in the Republic, is now €331,340 in Dublin.
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However, while they remain higher than elsewhere, rebuild costs in Dublin have increased by a relatively low 5 per cent over the past 12 months, compared with 9 per cent in the northwest region, where the cost of reinstating a three-bed semi now stands at €270,090.
Meanwhile, Galway and Limerick both recorded rebuild cost increases of 7 per cent and Waterford and the northeast recorded rises of 8 per cent.
SCSI vice-president and chartered quantity surveyor Tomás Kelly said the differences in the rate of increase and price levels from region to region were determined by demand for builders and tradespeople.
“The rate of inflation in the reinstatement costs can vary across regions for a variety of reasons, but is principally driven by the level of activity in a region at a given time,” Mr Kelly said.
“The northeast is experiencing significant development, and its proximity to the Greater Dublin Area is a factor that sees a continuing narrowing of the cost differential in rates.
“Again, this year, in the northwest, we are seeing the highest rate of increase. Whilst it remains the lowest rebuild cost region, the gap is reducing, and it is currently about 6 per cent below the average of the regional locations.”
Overall, Mr Kelly said the rise in rebuild costs continues to be driven by competition for labour and labour costs.
“Rebuilding work faces stiff competition from other construction work, including new residential construction, and if demand for that increases in an area, this reduces capacity and potentially increases the costs of such reinstatement work,” he said.
New Government duties – including the Landfill Levy, introduced in 2024, and the 2025 Waste Recovery Levy – have also added to costs, particularly for demolition works.
Against this backdrop, SCSI has warned homeowners to be aware of the dangers of underinsuring their homes.
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“It is sometimes thought that the market value of a property – in other words, the expected price which would be achieved if the property is sold on the open market – is the value for which the property should be insured,” Mr Kelly said.
“This is not the case, as the relevant figure which needs to be calculated for insurance purposes is its reinstatement value, ie the cost of replacing the property if it were to be destroyed.”
Homeowners must also take care to reassess their insurance cover to account for any changes such as home office extensions or garden offices, he said.
