House rebuilding costs have increased by an average of 7pc nationally over the last 12 months, the Society of Chartered Surveyors Ireland (SCSI) found.
The cost to reinstate, repair or replace a home should be fully reflected in an insurance policy if homeowners were to be properly covered, the surveyors said.
If the rebuild costs do not fully reflect the current construction costs, then insurers will not fully cover the householder in the event of a claim.
The SCSI has updated its House Rebuilding Guide, showing that national average rebuild costs, which include demolition and site clearance, have increased by an average of 7pc over the past 12 months.
This is up from the 6pc rate of increase last year, but down on the 12pc increase recorded in 2023.
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SCSI vice-president Tomás Kelly, a chartered quantity surveyor, said the level of increase in rebuild costs was above that seen generally in the construction sector because it had been more heavily affected by labour costs and availability.
Construction contractors prefer working on new buildings because rebuilds can be messy and expensive.
The guide shows that the minimum base cost of rebuilding a typical three-bed semi, one of the most common house types in the country, is €331,340 in Dublin.
The cost of rebuilding a similar house in the North West is €270,090 – a difference of €61,250. In Cork, the rebuild cost of a typical three-bed semi is now €280,208, up €8,400 on last year.
For Galway, the rebuild cost is now €269,500, and it is €267,800 in Limerick.
This is not the case as the relevant figure which needs to be calculated for insurance purposes is its reinstatement value
Mr Kelly said the main cost drivers had been the introduction of two new levies, the landfill levy, from September last year, and the recovery levy, from January this year.
These would mean additional costs for demolition works, he said.
SCSI president Gerard O’Toole said two issues that came up regularly regarding insurance were consumers mixing up valuations with rebuilding costs.
“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.
“This is not the case as the relevant figure which needs to be calculated for insurance purposes is its reinstatement value, i.e. the cost of replacing the property if it were to be destroyed.”
He said that many homeowners did not realise that if they were not adequately insured they may have to pay a proportion of the reinstatement costs themselves in the event of a claim.?
Mr O’Toole said that if the rebuilding cost of a property was €400,000 but the sum insured was for €300,000, that property would be underinsured.
He said that, for example, if there was a claim for damage under the policy of €100,000, the insurance company payout would be only €75,000.
This was because the policy holder was 25pc underinsured.
The SCSI’s House Rebuilding Calculator and the 2025 Guide to House Rebuilding Costs is available free at scsi.ie.
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