Cost check

Vinod Behl

It makes investment sense for home  buyers to  have full knowledge of the various factors that determine the overall cost of a residential unit, be it an apartment or a villa. Buyers are generally skeptical about being overcharged by the developers and usually have no means of knowing the break-up of the final cost that they would be paying for a home. Here are some simple guidelines that can help you ascertain whether your developer is charging a fair price or not:

On a broad level, the cost of an apartment constitutes land cost and development cost, which involves construction cost and other costs like approval costs, marketing cost, finance cost, administration cost and consultant fee. 

The land cost is generally 30-45 per cent of the total project cost. The construction cost amounts to 40-50 per cent of the total project cost, while the other costs can vary  between 8-14 per cent.

For any apartment complex, the development approval cost may vary between Rs 75 and Rs 100 per sq ft of the saleable area. For luxury, premium and mid segment projects, the cost is around Rs 80 per sq ft , whereas for an affordable housing project, it can be Rs 75 per sq ft. 

The construction cost also varies depending on the type of project. For a luxury project, the cost can be roughly Rs 2,700 per sq ft. For premium, mid segment and affordable housing project, the cost of construction can be in the range of Rs 2,350 per sq ft, Rs 2,150 per sq ft and Rs 1,350 per sq ft, respectively.

The construction cost also varies with the number of floors being constructed. For a group housing project having 5-8 floors, the construction cost for affordable, mid- segment, premium and luxury housing can approximately be Rs 1,300, Rs 1,900, Rs 2,250 and Rs 2,500 per sq ft, respectively. For a project having 8-15 floors, the construction cost  on an average is Rs 1,450, Rs 2,100, Rs 2,400 and Rs 2,700 per sq ft, respectively. For projects having  more than 15 floors , the construction cost  can be Rs 2,250 per sq ft for a premium project, whereas for a luxury project, it can be Rs 2,900 per sq ft.

As a thumb rule, the construction cost for G+ 15 floors is 4 per cent  higher than that for G+ 8 floors. 

The construction cost of a building with over 15 floors is generally 12.5 per cent higher. The cost of construction also depends upon the way in which construction is done. The construction cost with conventional method is Rs 2,550 per sq ft and timeline of 55-60 months  while the construction cost with ASF technology is Rs 2,700 per sq ft, with a completion time line of 48-52 month. Though 6 per cent more cost involved with ASF technology, yet there is 15 per cent cut in delivery time.