How Much Does it Cost to Build a House in Chania, Crete?
It’s almost impossible to provide a quick and accurate answer to such a complex question. There are just so many parameters at play with a different scale of impact on the total cost of the project, like the size of the project, the location of the land (seafront spots in Chania or in Platanias area will cost a whole load more than land plots located in Kisamos or Akrotiri area).
Whether you are a property owner or a real estate investor, it is critically important to have a reliable and precise estimation of how much a building project in Chania, Crete will cost and how long it will take before you start.
In this Simple Mind Series guide, you’ll get an in-depth look at the essentials of construction cost estimating, including the construction process and what can cause the budget to rise unexpectedly. We will also look at the main types of construction contracts, best practices, the use of historical data, and quantity survey accuracy.
What is Construction Cost Estimation?
Construction cost estimating is the analytic process of predicting the overall costs of a new building project. Being able to precisely estimate this is an indispensable factor in the project’s success.
Project owners and developers also use a wide range of construction cost estimation methods to successfully determine project feasibility, scope, time frame and budget. An accurate and reliable construction estimation prevents property owners and developers from losing money, ordering the right amount of materials and staying in line with their budget.
Construction cost estimating involves, critical thinking, decision making and a plethora of risks. However, the most critical parameter is that the construction cost estimate it’s an estimate – the systematic process of forecasting the cost of a building or structure.
As the project progresses, you may run into challenges that push the price up. Conversely, you may also find new ways or alternatives to meet deadlines, and save money or materials. As a result, it’s normal for the same project to have multiple estimates over its lifespan.
Failing to prepare a reliable cost estimate can have catastrophic results for the project as a whole. Precisely estimating the cost of any construction project is almost impossible, and projects can fail for a wide range of unpredicted reasons and causes. However, a professional estimator will account for as many factors and parameters as necessary — including such features as market conditions, historical prices, market volatility, materials availability, project size and location — to create an accurate estimate.
The accuracy of a reliable construction cost estimating method depends on a number of things: the quality of the project plan; the size of the project itself; the experience and level of knowledge of the estimator; the accuracy of cost information; and the quality of any tools, methods and measurement mechanisms the estimator uses.
Equipped with an accurate cost estimate, you can reasonably determine the financial feasibility of the project, proceed to necessary modifications and alternatives if needed, finalize the scope, and develop a much more effective monitoring budget as the construction project progresses throughout the design phases.
Moreover, a precise construction cost estimate – apart from the significant risk and unnecessary contingencies mitigation – enables project owners to price-check builder’s and contractor’s quotes and independently confirm the accuracy of estimates and material costs.
A good starting point is this Construction cost estimation & bid tabulation template.
ARENCOS & Chania Construction Cost Estimating.
At ARENCOS we are familiar with property owners and investors worrying about the financial impact of cost overruns and failure to complete a project. That’s why we devote time and effort by integrating our know-how, Big Data, Advanced Data Analytics and dedicated quantity surveys to assist us in estimating how much a project will cost before deciding to move forward with it.
Likewise, project owners can use our Funding and Financing Advisory services to determine a project’s scope and feasibility and to allocate budgets wisely but also ensure that their project meets financial feasibility and scope requirements.
We assist clients in navigating emerging trends and new economic realities with holistic Business Modeling and detailed valuations. This approach is the core component of our
Material Selection and Project Assessment service that tracks a project’s performance against the total time and cost estimate.
DISCLAIMER: Any articles, templates, or information provided by ARENCOS on the website are for reference only. While we strive to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, articles, templates, or related graphics contained on the website. Any reliance you place on such information is therefore strictly at your own risk.
Construction Cost Estimating Process
Understanding construction cost estimation requires you to have a good knowledge of the construction process and the risks and uncertainties associated with the project itself. (If you’re interested in learning more about the construction process, Understanding the Design-Build Process and the Factors Affecting Construction Cost are excellent resources of information.)
Here are the four most critical phases of a building project:
Phase 1. Conception, Design & Planning
Before you can get going on any project, you need to have an idea and a concept that could be integrated into the design.
At this stage, the goal is to come up with a solid idea, and a working design, and plant the seeds that determine the general scope of the project.
At this stage you nail down the following:
Project budget, needs and preferences. Essentially, at this stage, you need to share your priorities, the negotiables and non-negotiable requirements for the project. What are you trying to accomplish? Is that a luxurious new property with a pool? A detached villa or an apartment?
Remodeling or renovating an existing structure? How much do you have to spend? Consider things like personal style, number of bedrooms, living room size, number of windows, energy efficiency, etc.
Logistical considerations. You’ll also need to think about what it’s going to take to meet the requirements specified. This might include things like adequate garage space, guest house, plant care needs, etc.
Neighbourhood covenants. It is also essential to take into account the logistical considerations inside the property line and make sure you understand any standing neighbourhood covenants. This includes any guidelines that dictate the style or layout of a new build, as well as things like fencing options, paint colours, and building materials.
Initial concept design. ARENCOS consider the Initial Concept Design, as a critical stage of any project, as an opportunity to capture all of the influencing factors and assess ideas with the client and other parties. This initial design is a key stage of any project; it sets the parameters for the scheme design that follows and captures all of the influencing factors that might inform the design decisions.
Phase 2. Pre-Construction
Pre-construction involves a range of activities that happen between the initial planning stage and the physical construction. Apart from finalizing design plans, you’ll also need to take care of the following tasks during pre-construction:
Permits. You’ll need to secure all necessary building permits before construction works are planned or start. It’s important to understand that this step takes a lot of time. You need to ensure that you not only meet building codes, but also zoning requirements and HOA rules. Additionally, you may need to secure entitlements–a process that can involve visits to administrative authorities, tax offices, town halls, and more.
Quantity Survey and Cost Engineering. A very critical step is to develop an accurate estimate of how much the project will cost. That means looking at the site conditions, requirements, regulations, materials, labour, and so on to estimate the overall cost of the entire project
Quantity Surveying is broadly concerned with the estimation, planning and control of the cost of construction. It covers a wide range of activities including cost estimation, cost planning, value engineering, feasibility studies, cost-benefit analysis, lifecycle costing and valuation.
Procurement. This step is all about procurement: materials, equipment, and labour needed to complete the project. At this point, it’s also a good time to ask for photorealistic 3D renderings to bring the project to life and assist your decision-making.
Phase 3. Construction
Of all the phases of a construction project, the third phase is the only one focused on the physical building process and its structural elements. So far, you’ve secured the proper permits, hired contractors, and finalized plans. Now, it’s time to break ground and turn plans and ideas into reality. Here’s a look at the activities typically associated with this step:
Safety and quality control. Before construction begins, you’ll want to make sure you develop a system for monitoring and measuring performance–particularly where quality and safety are concerned. That means setting clear KPIs and establishing a system that allows teams to course-correct in real-time–when performance drops–or goes in a different direction.
Keeping the project on schedule. This responsibility falls on the construction manager. It’s their job to communicate with key stakeholders–the project team, general contractor, designers, architects, engineers, and whoever else is involved to ensure everyone is on the same page and aligned around the same goals.
ARENCOS has developed a state-of-the-art platform named ARENCOS.me that allows clients to see their projects and work progress in real-time. Furthermore, dedicated reports and analytic surveys are produced and shared with the clients to provide information about project delays – if any, construction materials shortages and change management decisions.
Updating clients. The designer or architect is typically responsible for keeping clients in the loop—communicating information about how the project is progressing when certain milestones will be completed, or whether any changes need to be made to the budget or schedule. AREENCOS via ARENCOS.me, allowing property owners and third parties to collaborate directly inside design files.
Phase 4. Close-out
This is the last phase, which takes place after the build is complete, but before the project is officially handed off to the property owner. The scope is making sure that everything has been completed according to the client’s specifications–and ensuring that there aren’t any unfinished works or lingering issues.
A typical project closeout will also usually includes collecting documents, checking provisions and specifications, project and contract requirements, cleaning up the site, and closing all existing contracts.
According to a survey from ARENCOS, if the project management is problematic and not efficient enough you can expect an equal amount of time spent on project closeout as you did on the physical completion of an entire project.
For example, if it took you 8 months to complete a residential building in Crete, you will probably spend up to 8 months on the project closeout process.
Construction Cost Functional Divisions
Creating a cost estimate for a construction project in Crete, Greece as requires a systematic way of enumerating costs. To make things easier, ARENCOS implements and integrates into the cost estimation process the Uniformat scheme which divides the building into a set of seven functional and interconnected divisions.
Next, we produce reliable cost estimates based on costs per square meter. These seven divisions are:
- Substructure
- Shell
- Interiors
- Facilities
- Equipment and furnishings
- Special structures
- Building site work
The next step comprises the design and development of a dedicated bill of quantities which is an itemized list of the works and materials required for a construction project. This involves:
Taking-Off Quantities: measuring the tasks and items of work in a construction project. This involves scaling dimensions from drawings.
Squaring: multiply the dimensions of the component into square area and then multiply this by the number of times this work item occurs in the construction. The resulted figure provides the total dimensions, length, volume, and area as applicable.
Abstracting: gathering and ordering of the squared dimensions. Similar tasks, materials, equipment and components are grouped together. Then the total dimensions must be merged to generate final figure. Deductions for any voids or openings in the structure, such as stairs are necessary.
Billing: presenting item descriptions and quantities in a structured format, the bill of quantities.
Construction Cost Estimation Elements
Quantity Take-Off: Designed during the pre-construction phase, a quantity take-off measures the materials and labour required to complete a project.
Man Hour: The man hour, is a unit of work that measures the output of one craftsman, technical or professional working for one hour.
Man Rate: The man rate is the amount per hour one pays to skilled craftsmen. This includes not just the basic hourly rate and benefits, but the added costs of overtime and payroll burdens, such as worker compensation and social security insurance.
Material Cost and Equipment Prices: Since the cost of materials is subject to variations based on market conditions, the uncertainty is relatively high. Moreover, the equipment cost (such as cement mixers and cranes required in a construction project) is strongly related to the time required to complete a specific task and thus historical cost data are critically important for an accurate estimation.
Subcontractor Quotes: During the entire life-cycle of a project most contractors will hire other subcontractors to complete parts of the construction. These subcontractors’ quotes should be added to the total estimate.
Indirect Costs: Indirect costs are expenses not directly associated with the construction projects, such as design fees, legal fees, permits, administrative costs, and any number of other costs, depending on the particular project.
Historical Data & Construction Cost Estimating
How many times have each of us asked ourselves “if I only had the chance to do that over again?” Or maybe you’ve said, “if only I knew then what I know now.” All of us, whether we are property buyers, property owners, developers or investors, make decisions based on our past experiences.
As a point of reference, sometimes we ask others about their experiences, especially if we don’t have our own history to fall back on. So, why do we do this? It’s because we want to take advantage of that experience in order to assist our decision-making.
Those same principles apply in construction cost estimation, where the goal, in most cases, is to end up with something that will provide you with a much clearer picture and a competitive edge. Using historical project data to help make strategic business decisions can play a significant role in construction cost estimation.
Historical data can assist us you decide what materials or equipment are right for the project. And, equally important, it can assist us to determine what materials, equipment or decisions are wrong for the project. Most people that perform construction cost estimations understand the importance of having and using historical project information.
The problem is that very few businesses in Greece have the methodologies, procedures, and know-how to effectively use historical data and Big Data Analytics to improve their project processes and to support their development procedures.
ARENCOS is the only firm in Crete which provides tools for collecting and saving data samples, displaying historical reports, uploading data to a relational database or transforming historical data into a piece of useful information.
Unlock Investment Intelligence
From Chania historical property prices to construction activity data. Harness the power of Big Data and AI to build confidence in your decision-making. Datanalytika assists clients to replace the information with reliable data for the real estate and construction activity in Crete, Greece and turn information into insight.
From historical prices to new and novel research in the construction sector of Crete, discover our large collection of Real Estate, Architecture and Engineering articles, covering a range of disciplines, from the theoretical to the applied.
What are the Factors that Significantly Affect Construction Costs?
Cost is undoubtedly the most significant concern in any business endeavour, not only in the construction sector. Poor cost management in construction projects has become a critical factor for both construction firms and property owners. In order to effectively estimate the pragmatic numbers, it is important to exercise foresight of the various project-related factors and address the magnitude of their effects.
Building a house or any residential or commercial structure is a fascinating but expensive process. Numerous factors significantly affect the cost estimation of a construction project, its economic viability, and time schedule. Each factor has to be correctly estimated based on holistic research, past experience, and access to critical information to successfully estimate the total cost of a construction project.
Moreover, the construction cost depends on many externalities and complexities that may occur in the local or international markets and sectors.
Many construction projects in Crete, Greece suffer from exceeding the estimated cost due to different causes. For instance, our study revealed that 7 out of 10 residential construction projects experienced cost overruns with an average budget overrun between 18-25%.
In addition to that, a useful finding of this study shows that only 34% of residential construction projects on the entire island of Crete were delivered within the contract amount.
