The construction costalso called productionrepresents the expenditure required to produce a good that does not yet exist; mathematically it is obtained from the most probable sum of expenses which, in the expert’s opinion, a pure entrepreneur should support.
When dealing with the construction sector the cost organization undergoes substantial differencestaking into account the different phases of the building process and who is promoting it.
Construction Cost: The Formula
The formula to determine the cost is:
K = KA + Kc + St + On + In + Imp + Impr + U
Where:
KA = cost of the area
Kc = building construction cost
St = technical expenses and professional fees
On = concession charges
In = interest on financial capital
Imp = taxes
Print = unexpected expenses
U = promoter’s profit.
Construction Cost: Things to Consider
It is evident that the determination of the construction cost takes place in a design phasewith evaluation models that can be either synthetics That analytics.
This is a study generally carried out in different phases of the project development, in order to define, in addition to the most probable cost valuealso the minimum price in the presentation of sales offers.
Another typical aspect of the construction sector is the fact that costs can have different articulations, considering that the project is developed by a promoter rather than a construction company.
In determining the construction cost, the design elements are fundamental and also influence the choice of the procedure to adopt; it is clear that in the presence of a basic project it will necessarily be necessary to resort to synthetic processesvice versa, in the presence of a executive projectit will be possible to proceed in analytical way as they are note all the variables which affect the formation of the cost, such as for example the intended use, the planimetric distribution, the materials used and the construction methods.
The synthetic procedure: the reduced formula
In the case of synthetic procedures, the expert will have to identify a sufficient sample of buildings similar in type and construction technique, of which he knows the construction cost, in order to be able to carry out an comparison. Generally, the comparison is used Cost parameter per square meter of surface areaobtained with reference to the gross external surface area of the different floors of the building; in some markets the cost per m3 empty for fullwhile for some types of properties other parameters are used, such as the number of rooms (hotels), parking spaces (garages and car parks), beds (hospitals) and so on.
In this way the formula to determine the construction cost (Kt) is determined by the chosen parameter; let’s assume that this is the cost per square meter of gross external surface area, we will have that:
Kt = Design surface ∙ Kt m2
The synthetic method, however, presents a high degree of approximation which makes its use inadvisable, especially for inexperienced technicians.
Much more reliable is the analytical methodology, widely used in construction, which consists in the use of estimated metric calculationto define the probable technical construction costs of the building.
The analytical procedure: the estimated metric calculation
The estimated metric calculation It is a technical document in which the work required to create a specific property is determined, whether newly built or under renovation, with an indication of the related costs. In the calculation the expert proceeds to determination of the necessary construction elements for construction, indicating the necessary quantities to which the various unit prices are to be applied, such as taken from price lists in force in the reference area, generally based on the regional price list or on market research.
THE costs can be traced back to the following voices:
- technical construction cost
- materials (valued in quantity €/unit of measure)
- labor (valued in time €/hour)
- rentals and transport (valued in time €/hour)
- fixed costs (valued as a percentage of the technical cost)
- professional fees
- overheads
- business profit
For the preparation of the estimated quantity survey, the starting point is necessarily the executive project of the work on which to base the calculation of surfaces and quantities. The technician, working on the project graphs, will have to identify with certainty the types of work by breaking them down and dividing them into homogeneous categories.
