Householders facing higher premiums for home insurance
HOMEOWNERS are set to pay more for insurance after new figures revealed a surprise hike in the cost of rebuilding a house.
Higher value added tax (VAT), tighter regulations on insulating homes and an across-the-board rise in the cost of building materials mean that rebuilding costs have risen for the first time in years.
Despite the severe downturn in the construction sector, it now costs €168,000 to rebuild a typical three-bed house in Dublin and €141,700 to rebuild a four-bed detached house in Donegal.
Rebuilding costs have jumped by 1.5pc on average in the course of the past year, according to new figures from the Society of Chartered Surveyors Ireland (SCSI).
This comes after sharp declines every year since the property market peaked almost five years ago. However, rebuilding costs are still down 24pc from 2008.
Andrew Nugent of the SCSI said rebuilding costs were up 0.52pc in Dublin, but up 2pc in Waterford. Meanwhile, Cork, Galway and Limerick all saw rises of just under 2pc.
He blamed new building regulations that require better insulation for walls and floors, new rules on air tightness, a general rise in the cost of materials and higher VAT on professional fees, along with an increase in the price of oil.
Mr Nugent said the increases mean that homeowners were now facing higher home-insurance costs.
"The falls in recent years spelt good news for homeowners in that they could expect a pro-rata reduction in their house insurance premiums," he said.
"However, it now appears we have come to the end of that trend and some owners may face very modest increases, if any."
Higher home-insurance costs come at a time when premiums have been falling. The most recent figures from the Central Statistics Office show that home-insurance costs fell 10pc in the past year.
The rebuilding cost has nothing to do with the market value of the property.
It now costs €210,000 to rebuild a four-bed, semi-detached house in Dublin. This is up slightly this year, but down from €276,000 in 2008.
Mr Nugent said it was important that homeowners did not under-insure their homes. If they do, he said, then they will only be able to claim up to the value for which they have the property insured in the event of damage to the building through fire or some other catastrophe.
The society has a guide at www.scsi.ie, which surveys rebuilding costs for the main house types in seven areas -- Dublin, Cork, Galway, Limerick, Waterford, the north-west and the north-east.
Meanwhile, it has emerged that more than a third of householders own their homes outright and do not have to worry about mortgage costs.
Co Mayo has the highest proportion of households that own their homes outright at 45pc, according to calculations based on census figures worked out by property consultants CBRE.