May 16, 2024

Construction Costs for a New Project

Construction costs help to identify the total project cost at the stage of planning and designing. While the actual cost of a construction project can be different from the initial budget and estimation, when you have an idea of the cost involve for a project, it will serve as a guidance to prepare the preliminary cost estimates and budgets.When you participate in competitive bidding,it is also necessary to prepare an accurate cost estimation for the project in order to submit a realistic bid.

What are the construction costs?

Construction costs are the total monies spent for building materials and labor. Total construction cost is divided into separate funds appropriated to costs for development plans, building materials, construction crew payment, and miscellaneous fees.

Development plans and drawings

Development plans serve as a guide for construction. Its construction costs are paid by those who want to build a building or invest in a construction project that is unique from the others around it. These development plans will show some interests of the owner.

These construction costs are paid for the architectural and engineering services or companies who design the plans.Check these 4 stages of construction project design for more details on design phase.

If it is a house construction, you can choose to hire an architect, you can work with him or her to make sure your ideas are accurately represented in the drawing. After the drawing is complete, you may need to have it approved by your local zoning office and if necessary, go back to your architect to make the required adjustments.

However, in large scale construction projects, all these design tasks are assigned to a design firm making sure that they will handle all the necessary submissions for approval of authorities. All these costs are included in their consultancy fee for producing the drawings and plans for the construction project.

Cost of Materials

Building materials or construction materials go into the makeup of the project and are estimated before the actual construction begins. Building materials vary in their quality, price and construction costs associated with manipulating the materials.

In large scale projects, the Employer can select the kind of materials for the project comparing the quality of the different brands of materials. It is also important to compare the prices of the different brands of materials. However, a Quantity Surveyor or Contract Administration team will help the Employer to make better selections based on experience, saving construction costs in the long run.

Costs of Construction crew  

Costs for construction crew include the payment for the labor required to deliver the project according to the initial plans. Nowadays, instead of hiring labour directly for construction projects, most companies like to hire a contractor and assign all the labour tasks for his company.

Additional construction costs

Other than the above, you also need to consider the additional costs for the project. These Additional construction costs that do not involve the materials or labor of the job include costs associated with building permits, insurance fees, building inspectors, and legal fees that may arise from disputes.

Also there will be a cost for professional fees. If it is a large scale project, it is necessary to establish an office for the project which will add overhead costs for the development.

When you know these costs involve in any construction project, it is easy to prepare the construction project estimate. This estimate will help you to bid for tenders or plan your project budget.

Also read: Hidden Costs and Dangers of the Shortcut

Amila Gamage

Amila Gamage is the founder of Sihela Consultants and Builtlogy digital magazine. Her experience in the construction industry is over 17 years specializing in contract management. She is also an ACLP certified trainer in Singapore and conducts workshops and training sessions on related topics.

View all posts by Amila Gamage →

24 thoughts on “Construction Costs for a New Project

  1. This is a great information just in time for me. My famiy is planning to constrcut a new house, this gave me some ideas on where to start.

  2. There is so much involved when it comes down to the construction of a building. As much as I would like to get a custom built home I will save and buy an existing one.

  3. This is a great breakdown! My boyfriend actually just became an Electrician Apprentice so we’ve been discussing construction site and details lately. 🙂

    Marriah Tarango

  4. Nice, what a detailed post. Good to know all the things when planning on constructing. I assume this also applies in renovating your house?

  5. Your post is very informative and will help for my future project, it is so much easier to figure out budgets when someone tells you, great post

  6. Very detailed post thank you. I’m sure a lot of people will find this information helpful when it comes to renovating their homes too!

  7. I work in properties – with students in particular so I talk to a lot of landlords to invest money into building blocks for the students. There are a lot of costs that go into it- but with the right planning the right team and the right PM it is always worth the job!

  8. Great explanation on construction costs. It is very detailed. Thanks for informing and enlightening us.

  9. I can imagine that this is pretty pricey and didn’t know much about this so I enjoyed reading this post.

  10. That’s a detailed and informative post on construction costs.. Thanks for sharing this information

  11. Hi Amila.. this is all good information but I would like to stress the importance of not over looking any additional costs. This was at the end of the post but is where the entire project can go south. If you are bidding for a project you can lose money quickly here and if you are looking for contractors and didn’t account for this you may pass on a great price (by thinking they are over charging) and a great contractor for a less expensive and experienced one.

  12. Thanks for highlighting.Yes,preliminary costs are important and some contractors forget or fail in estimating their preliminary costs accurately.This can lead to lot of issues including losing money from projects.

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