Cost Estimation Methods in Building Construction

1. Plinth Area Method

This is the most commonly used preliminary estimation method.

Description

The cost of the building is estimated based on the plinth area (built-up area measured at floor level).

Formula

$$\text{Estimated Cost} = \text{Plinth Area} \times \text{Rate per sqm}$$Estimated Cost=Plinth Area×Rate per sqm

Features

• Rate includes walls, finishes, and basic services
• Based on past similar projects

Advantages

• Simple and quick
• Useful at planning stage

Limitations

• Less accurate
• Does not reflect design complexity

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2. Floor Area Method

Cost is estimated using floor area, excluding wall thickness.

Formula

$$\text{Estimated Cost} = \text{Floor Area} \times \text{Rate per sqm}$$Estimated Cost=Floor Area×Rate per sqm

Use

• Residential buildings with repetitive layouts

Difference from Plinth Area Method

Floor area is smaller, so rate per sqm is higher.

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3. Cubic Content Method

Cost estimation based on volume of the building.

Formula

$$\text{Estimated Cost} = \text{Volume} \times \text{Rate per cubic meter}$$Estimated Cost=Volume×Rate per cubic meter

Volume

$$\text{Length} \times \text{Breadth} \times \text{Height}$$Length×Breadth×Height

Advantages

• Considers height of rooms
• More accurate than area methods

Limitations

• Complex measurement
• Not suitable for buildings with varying heights

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4. Approximate Quantity Method

Estimation is based on percentage distribution of major components.

Typical Distribution

• Foundation & plinth: 10–15%
• Superstructure: 45–50%
• Finishing: 25–30%
• Services: 10–15%

Advantages

• Useful for budget comparison
• Quick feasibility analysis

Limitations

• Not item-specific
• Approximate accuracy

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5. Unit Rate Method

Cost is estimated per functional unit.

Examples

• Per classroom
• Per hospital bed
• Per hotel room

Use

• Institutional buildings

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6. Bay Method

Cost is calculated per structural bay.

Used For

• Industrial buildings
• Warehouses

Advantage

• Accounts for structural repetition

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7. Service Unit Method

Used where service demand defines cost.

Examples

• Cost per patient (hospital)
• Cost per student (school)

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8. Detailed Estimate Method

This is the most accurate method.

Process

• Quantity take-off for each item
• Rate analysis using SOR
• Preparation of abstract of cost

Accuracy

±5–10%

Use

• Tendering
• Final approval

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9. Comparison of Cost Estimation Methods

Method	Stage	Accuracy
Plinth Area	Preliminary	Low
Floor Area	Preliminary	Low–Medium
Cubic Content	Preliminary	Medium
Approximate Quantity	Feasibility	Medium
Detailed Estimate	Final	High

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10. Conclusion

• Preliminary estimates → Plinth / Floor / Cubic methods
• Feasibility studies → Approximate quantity method
• Execution & tendering → Detailed estimate method