#### Cost of Construction Calculation for Individual Homes and Buildings

Sep 20, 2022

It is a dream of every person to create wealth in their lifetime that will appreciate over the next few decades and pass it on to his children or loved ones in the future. The focus will be on spending every rupee in an effective manner and not to waste money where there is low or no value when building a home

The journey first begins with land procurement which will be roughly about 30-70% of the investment based on the location, if it is inside the city, they have to shell higher cost close to INR 75000-200000 per square yard. After this, the next cost that needs to be considered is the cost of construction of the home or building. Like land rate, this is not fixed cost with low variance, land rate might vary between 3-5% depending on the area and the seller and buyer negotiations as  here the cost of land is mostly fixed as per the location of the land.

Cost of construction of a building or home is purely dependent on the type of building you chose to build and the fitments you will use. So, the price of home or building construction can vary between Rs. 1500 per Square Feet to Rs. 6000 per Square Feet.

So, how do we arrive at this cost of construction?

We need to have a scientific approach as every building is unique and cannot be compared with the other. Depending on your site soil condition, design, choice of fitments and brands, the price per square feet will vary. We follow the activity/item-based costing model which is linked to Bill of Quantities and Bill of Materials, it is a more transparent and scientific approach for construction and manufacturing industries where a lot of ambiguity and overheads are involved.

Let’s see how the cost of construction varies stage by stage:

Soil Conditions and Structural Designs- Soil conditions vary from site to site and we need to do a Soil Bearing Capacity (SBC) test to analyze the load bearing capacity of the soil and need to see if it can take the planned structural load of the building, if the soil bearing capacity of the soil is low, in case of black cotton or semi-black cotton soil, we have to design the structural design with higher steel and might also need to go for raft or consolidated footing depending on the soil test results. Many contractors avoid this test and give a base cost per square feet irrespective of the soil conditions. It will be detrimental for the building's structural life if it is not designed as per the soil conditions. The steel can increase by 100% also in some cases where there is black cotton soil as we need to consider higher safety factors. This can highly impact the cost by Rs. 50-200 per square feet depending on the soil conditions of the site and the structural design based on soil bearing capacity.

Choice of Materials RCC- Most preferred cement for RCC works is OPC-53 Grade, but this is the era of blended cement with special additives so Ultratech Super Or Bharati Ultrafast or some other higher end blended cement might be considered by clients when building their homes, so it might impact by Rs.15-30 per square feet based on the cement brand and the grade of concrete considered (M20 or M25).

Steel brand selection also has an impact on overall cost of the building Shree Steel will cost Rs. 67000-70000 in normal conditions and Tata Steel or Vizag or JSW will cost close to Rs. 8000-10000 per ton extra in Hyderabad, so if we take a typical G+2 building the choice of a brand like TATA will cost Rs. 25-50 per Square feet.

The RCC Structural design also will impact the cost as we have discussed in the above section. If you are going with natural river sand instead of manufactured Robo sand in your concrete mix the cost will be higher by Rs. 20-30 per square feet depending on the grade of concrete and the quantity of concrete required.

Choice of Materials Fitments- Lot of items go into a home apart from cement and steel like sanitary, electrical, plumbing, flooring, paints, doors, windows, etc. These make up around 40-50% of the construction cost in standard buildings and can go up to 60-70% of the cost in very high end and ultra-luxury homes or buildings.

There are many different brands in each of these categories and different price segments. Most of the home or building owners will need a large choice of materials to choose from and want to be sure they are choosing the best option.

For example, the cost of flooring can vary between Rs. 55 per square feet (Double Charge Tiles 2x2 ft size) to Rs. 800 per Square feet (Italian Marble or Wooden Flooring), this is only material cost, and labour cost will depend on the type of flooring. Sanitary ware taps range from Rs. 2000 to Rs. 12000 for similar use case in different brands and use cases. Main Doors range from Rs. 25000 to Rs. 2,00,000. So, for every building the quantity of doors, windows, sanitary equipment, wires, paints, etc will highly vary and is unique, so we cannot give a lumpsum pricing based on the type of building, we have to give customer options to choose and also follow a scientific item based pricing model to arrive at the unique price for the home or the building that was specifically designed for the customer. UPVC Windows range from Rs. 350 per square feet (window area) to Rs. 1400 per Square Feet (window area) depending on the brand and unique features like high-end imported profiles, sound proofing, tinting etc.

There is no end to luxury in home construction segment. You have a wide range of choices for fitments and interiors, every home is unique and we believe it should be beautiful and unique in its own way satisfying the customer needs and living requirements. The price here is very dynamic based on the choice of materials and the design. So, do not fall prey for lumpsum costing as it will be a loss either for you as a customer or to the contractor and he might leave the work in the middle or come back for price escalations in the future.

Extra Amenities or Additional Items- Needs of every customer are different and so there will be additional items items like RCC overhead tanks, additional capacity underground sumps, floor to ceiling height increase, swimming pools, high-end elevations, RCC underground tanks to store rain water, etc. So, the cost for all these items needs to be calculated individually and added to the home construction or building construction costs, there is no other approach to it. So, do not compare your construction cost with another building construction cost, it will not be an apple to apple cost comparison, as every home and building is unique.

Price Difference for Head Room and Stilt Floor Construction- Yes, the cost of construction for stilt or headroom will be less than other floors in the building as they will have lesser fitments and construction. When going for an overall proposal based on your total square feet area, this gets averaged out with the other floors, as we have to share the cost of construction of footing, sump, plinth beam, CRS masonry, soil works etc with all the floors. We cannot just add it in ground floor, we have to average it out throughout all floors and come up with a cost per square feet for the total built-up area. Even if someone gives you a quote with break-up (stilt, other floors, headroom) when you average it out, you will end up with a similar price as the cost of construction for entire building has to be calculated scientifically with the relevant selected quantities and then arrive at the total cost of construction and divide by the total slab area to get the cost per square feet, and this is unique to your own home or building.

When customers ask us for a price based on lumpsum pricing, before the design of floor plan, it will be difficult to accommodate such request as it will be a variable quote and we have not calculated based on quantities. You can see a sample quote in the link below on how we will give you a detailed quote with options to choose based on the price of the individual item. It will be transparent for you in the future to change any specific fitment item based on your choice. We believe construction should be simple, transparent with high-quality standards.