by easypropertymatch 
Estimating construction costs is crucial in planning and developing any real estate project. Whether you’re constructing your first dream home or you are a real estate developer, understanding the various factors that impact construction costs is essential. One significant consideration is the easement requirement, typically around 60% to 70% of the total lot area. Here’s a detailed guide on how to estimate construction costs, focusing on these critical aspects, with a practical example for a 150 sqm residential lot.
Determine the Total Lot Area:
- Decide how many smaller lots you want to create.
- Ensure each subdivided lot meets local zoning laws and regulations.
Easement Requirements:
- Easements are portions of land reserved for utilities, access, and other services.
- Typically, 60% to 70% of the lot area is reserved for easements, reducing the usable area for construction.
- Consult with local authorities to understand specific easement requirements in your area.
Practical Example
Let’s assume you have a 150 square meter lot:
Easement Calculation:
- Easement requirement: 30% of 150 sqm = 45 sqm.
- Usable area: 70% of 150 sqm = 105 sqm
- If 2 storey house: 105 sqm x 2 = 210 sqm.
- Note: Always check your LGU or Subdivision deed of restrictions regarding the easement requirements
Total Estimated Construction Cost/sqm in the Philippines:
| Type of Construction | Estimated Cost per sqm (PHP) as of 2024 |
|---|---|
| Low-cost Housing | 20,000 – 25,000 |
| Mid-range Housing | 25,000 – 30,000 |
| High-end Residential Housing | 40,000 – 50,000 |
| Basic Commercial Buildings | 25,000 – 30,000 |
| Standard Commercial Buildings | 30,000 – 40,000 |
| High-end Commercial Buildings | 40,000 – 60,000 |
| Basic Office Buildings | 25,000 – 35,000 |
| Standard Office Buildings | 35,000 – 50,000 |
| High-end Office Buildings | 50,000 – 70,000 |
| Industrial Buildings | 20,000 – 30,000 |
| Warehouses | 15,000 – 25,000 |
| Schools/Educational Institutions | 25,000 – 35,000 |
| Healthcare Facilities | 30,000 – 50,000 |
| Luxury Resorts/Hotels | 50,000 – 80,000 |
Estimating Construction Costs:
- Assume the construction cost per square meter for Midrange housing is Php 25,000/sqm
- Construction cost: 210 sqm (usable area) x Php 25,000/sqm = *Php 5,250,000
Estimating construction costs involves careful planning and consideration of various factors, including lot area subdivision and easement requirements. By following these steps and consulting with professionals, you can develop a comprehensive budget that accounts for all potential expenses. This approach ensures that your project is financially feasible and meets all regulatory requirements, paving the way for successful development.
Source:
The construction cost estimates provided in the table are based on general industry knowledge and average figures commonly referenced by real estate professionals and contractors in the Philippines. These estimates are influenced by a range of factors including labor costs, material prices, and the complexity of the project. However, they are approximations and can vary widely depending on specific circumstances.
For more precise and tailored estimates, it is essential to consult local contractors, builders, or real estate experts who can provide quotes based on the current market conditions and specific project requirements.
Sources for Further Reference:
- Philippine Statistics Authority (PSA)
- Construction Industry Authority of the Philippines (CIAP)
- Local real estate developers and construction firms
- Industry publications and reports
- Consultations with professionals and contractors