Cost estimates and planning: how to work out the true cost of construction

Cost estimates and planning: how to work out the true cost of construction

After choosing the plot and preparing the design, the next key stage is budgeting and planning. This is where it becomes clear how much the build will really cost, what is included in the budget, where additional expenses may arise, and in what sequence the project should move forward.

A cost estimate is not just the final figure at the bottom of a table. It is a construction management tool. The more detailed it is, the fewer misunderstandings there will be between the client, the contractor, the architect, and the technical specialists.

1. The estimate must relate to the project

It is not possible to accurately estimate the cost of construction based solely on visualisations or the total floor area of the house. To produce a realistic estimate, you need design solutions, dimensions, structural details, materials, building services, and an understanding of the site’s complexity.

It is important to check:

1. Whether there is an up-to-date set of drawings.
2. Whether the floor areas, levels and scope of work are clear.
3. Have the main materials been specified?
4. Is the structural element included: foundations, columns, floor slabs, staircases?
5. Have the building services been incorporated?
6. Have the site’s topography and access for machinery been taken into account?
7. Is it possible to calculate volumes based on the design, rather than simply an ‘approximate price per metre’?

A point that is not immediately obvious: the price per square metre can be very approximate. Two houses of the same area may differ in cost due to the shape of the building, the slope of the plot, large spans, panoramic glazing, retaining walls, a swimming pool and engineering solutions.

2. What should a cost estimate consist of?

A good quotation should show not only the total amount, but also the reasoning behind the calculation. The client should be able to see which works are included, in what quantities, and at what price. It is important to break down the estimate as follows:

1. Preparatory work.
2. Groundworks.
3. Foundations.
4. The structure of the house.
5. Roofing and waterproofing.
6. Facade and external works.
7. Building services.
8. Internal works and finishes.
9. Swimming pool, terraces, fences, driveway and landscaping.
10. Additional costs not included in the main scope of works.

If the estimate is too general, disputes almost always arise later on: what was included in the price, what was charged separately, why the budget has increased, and who should pay for the additional works.

3. What is often not included in the initial price

The most common problem is that clients compare several quotes based solely on the total cost. However, a low price does not always mean a better deal. Sometimes, important works are simply not included in the quote. The following items are often listed separately:

1. Soil removal.
2. Retaining walls.
3. Drainage and water diversion.
4. Connection to utilities.
5. Preparation of temporary access to the site.
6. Crane, concrete pump and complex logistics.
7. Additional tests or technical inspections.
8. Design changes after work has commenced.
9. Site landscaping.
10. Unforeseen work related to the soil or terrain.

A point that is not immediately obvious: a ‘cheap’ quote often ends up being expensive, not because of deception, but because the scope of work is incomplete. Therefore, it is important to compare not only the prices, but also the scope of the work.

4. The estimate must take into account the sequence of works

Planning is just as important as costing. Even a good estimate is useless if the stages are not arranged in the correct sequence. Before work begins, you need to understand:

1. Which tasks are to be carried out first.
2. Which stages cannot begin until the previous ones have been completed.
3. Which materials need to be ordered in advance.
4. When different specialists will be on site.
5. Where delays may occur due to approvals or deliveries.
6. What checks are required before concreting and the completion of concealed works.
7. Which stage could affect the entire schedule.

For example, a delay in engineering decisions can not only halt the engineering stage but also affect the concreting work, walls, ceiling heights and finishing works.

5. How does a technical quotation differ from a ‘commercial proposal’?

A commercial proposal often provides an indicative cost. A technical quotation should be more detailed: quantities, units of measurement, materials, works, the sequence of stages and any exclusions. It is important that a technical quotation includes:

1. The description of each item.
2. The unit of measurement.
3. The quantity.
4. The price per unit.
5. The total cost for the item.
6. A comment on the material or method of execution.
7. What is not included in the calculation.

A point that is not immediately obvious: if a cost estimate does not specify quantities, it is difficult to monitor. The client sees the total amount but cannot understand exactly what they are buying or where the budget might change.

6. Why a project has a greater impact on costs than it might seem

The cost of construction is not determined by floor area alone. The budget is influenced by decisions made as early as the design stage. The following factors have a particularly significant impact on the price:

1. A complex house design.
2. Large cantilevers and spans.
3. Panoramic windows.
4. Multiple levels and changes in elevation.
5. A plot on a slope.
6. Retaining walls.
7. A complex roof structure.
8. A swimming pool and terraces.
9. High-specification building services.
10. Facade and finishing materials.

Therefore, the correct approach is to discuss costs not after the project is completed, but in parallel with the design phase. This allows decisions to be made in good time that will maintain quality without breaking the budget.

7. What to check before approving the budget

Before finalising the budget and commencing work, it is important to go through the checklist.

1. The cost estimate corresponds to the current project.
2. All key stages of construction are included.
3. It is clear which works are not included in the cost.
4. Areas of risk are highlighted separately: ground conditions, gradient, access, and utilities.
5. The materials are described in sufficient detail.
6. There is a logical structure to payments by stage.
7. A preliminary work schedule is provided.
8. It is clear which decisions have not yet been made.
9. The procedure for approving changes is set out.
10. The client understands what they are paying for at each stage.

The STRUCTONIX Approach

At STRUCTONIX, we view the cost estimate as part of the project management system. For us, it is important not simply to quote the client a figure, but to show what it comprises, what works are included, where the risks lie, and how the construction project will progress.

A detailed cost estimate helps to control the budget, plan the stages, avoid unnecessary disputes and identify potential additional costs in advance.

Construction should not begin with vague promises, but with a clear design, a transparent cost estimate and a realistic work plan. In the next article, we’ll look at groundworks: how to prepare the site, what to check before excavating, and why this stage affects the foundations and the entire structure of the house.

Stay tuned and keep an eye on updates to the STRUCTONIX blog!

Sources and useful links

1. Technical Building Code / CTE: https://www.codigotecnico.org/QueEsCTE/Presentacion.html — basic requirements for the quality of buildings and their installations in Spain.
2. Royal Decree 314/2006 — Technical Building Code, BOE: https://www.boe.es/buscar/act.php?id=BOE-A-2006-5515 — the regulatory framework for the CTE.
3. Law 38/1999 on Building Regulation, BOE: https://www.boe.es/buscar/act.php?id=BOE-A-1999-21567 — parties involved in the construction process and their responsibilities.
4. Málaga City Council — building works procedures: https://urbanismo.malaga.eu/tramites/obras/ — municipal procedures for building works and licences.
5. Official Association of Architects of Málaga — Project Approval: https://coamalaga.es/visado/ — verification of the integrity and documentary consistency of the project.