Commercial Property Kildare Ireland

Reinstatement valuations are primarily used for insurance purposes and are effectively an estimation of the likely cost of rebuilding a property in the event of it being damaged or destroyed. The basis of a reinstatement valuation is linked with the cost of construction at the particular time. In recent years when the economy was strong, building costs rose as a result of an increase in both building materials and labour.  It was estimated at the height of the boom that the cost of constructing an average three bedroom house of say 1100 sq ft was in the region of €175.00 per sq ft, meaning the reinstatement valuation was in the order of €192,000.

The cost of insurance premiums for property in Ireland is continuing to rise and this can be attributed to a number of factors, notably the flooding in November last year which resulted in untold damage to both residential and commercial property around the country resulting in claims of €244 million according to the Insurance Federation of Ireland.

Due to the economic slowdown building costs in terms of materials and labour has reduced, thus the reinstatement value has naturally come down. Insurance companies will note the reinstatement value of the property in their policy document and it is financially a good idea to keep the reinstatement value of your property under review. For example if you undertook a reinstatement valuation of your property at the peak of the boom, the cost in today’s terms is now less and therefore this may well reduce the cost of the insurance premium.

Chartered Surveyors normally carry these types of valuations and will normally make reference to the guidance notes produced by the Society of Chartered Surveyors which provide an indication of tender prices in relation to building costs. It is imperative that the reinstatement value being placed on the property is correct as under estimation of the reinstatement value could prove more costly in the long term.