Cost of rebuilding some mica-affected houses has risen €50,000 in just one year

The cost to the State of the defective blocks redress scheme will likely increase by hundreds of millions of euro after a Society of Chartered Surveyors Ireland (SCSI) report showed construction costs have grown significantly.

The report estimates that the average four-bed rural bungalow in Donegal and Mayo would now cost €366,000 to rebuild, up by nearly €50,000 from a year ago. 

The average rebuild cost of a two-storey rural home with four bedrooms has shot up to €384,300 from €339,000 in February last year.

It was estimated that the total cost of the defective blocks grant scheme, which factors in homes affected by mica and pyrite, could be more than €3.5bn, but this was before the significant rise in prices this year.

The total cost could now end up being over €4bn, given spiralling costs.

Around 7,500 homes are affected by the defective blocks and will need to be rebuilt once demolished.

Most of these properties are in the northwest and along the west coast.

It is believed that only a minority of houses eligible for the scheme are on the large end of the property scale, with most being standard family homes.

The cost of rebuilding all types of dwellings has increased by 14pc to 15pc in the past 12 months, with inflation and growing construction costs to blame.

The SCSI valuation uses current labour and materials rates but factors in pre-2008 building regulation costs.

It was estimated that for houses in estates, a three-bed semi-detached would now cost €189,140 to rebuild, which is up from €165,000 last year. For larger rural standalone homes with five or more bedrooms, the average cost has gone up by €58,000 from €421,000 to €479,000.

Construction costs will vary depending on a number of factors, the SCSI said, including the size of the house and availability of labour, so rebuilds could be more or less expensive in reality.

A Department of Housing spokesperson said the Expert Group on the Enhanced Defective Concrete Blocks Grant Scheme will now assess the SCSI report and “make recommendations to the minister in relation to the cost per square metre rates for inclusion in the regulations”.

The average cost of most rebuilds has now risen by €20 for every square foot within the property.