Residential Building Projects: Building Cost Indicators and Drivers

Abstract

Time and costs are considered to be substantial success factors of building construction projects. In Germany, early cost estimates are provided by multiplying the cost indicator with the gross floor area. When preparing these estimates, the question arises as to which specific cost indicator has to be selected? The relevant cost drivers provide guidance for this selection. Drivers show which parameters are the determinants for the selection of the project-specific cost indicators. However, currently these drivers are not known for building construction projects in the German-speaking region. The relevant cost drivers for residential properties in Germany are identified by using regression analysis. These drivers are the median floor height, the share of the ancillary area for services, the construction duration, and the compactness of the building. Of the four cost drivers, the median floor height proved to have the greatest explanatory significance. The method proves to be suitable for answering the research question. However, some theoretically relevant drivers were not available for the properties being examined. Therefore, these drivers have to be followed up and examined during future studies. Detailed information should be included especially about materials, the planning and construction process, and specific data about various dimensions of the building.