The four qualifiers a benchmark cannot do without
| Qualifier | Question | Common error |
|---|---|---|
| Reference area | Which floor area is the figure divided by | Wohnfläche (habitable area) instead of gross floor area |
| Cost scope | Which cost groups are included | Building cost read as total project cost |
| Price date | Which quarter does the figure come from | Benchmark taken from a dataset without updating |
| Tax basis | Net or gross of VAT | Assumed rather than checked; both forms occur in every kind of source |
Together these four checks take under a minute, and they decide whether a cost estimate holds up. They replace no cost calculation but prevent the crudest errors.
Reference area: gross floor area is the standard
In German cost planning the standard reference area is the Brutto-Grundfläche (BGF), the gross floor area as defined by DIN 277. It covers all floor areas on every storey including the structure, so walls, stairwells and plant rooms are all inside it.
The Wohnfläche, the habitable area governed by the Wohnflächenverordnung, follows a completely different logic and is substantially smaller. A benchmark expressed per square metre of Wohnfläche is therefore always arithmetically higher than the same situation expressed per square metre of BGF, without the building being any more expensive. Consumer portals and house builders work almost exclusively in Wohnfläche, professional datasets in BGF. Placing the two side by side compares two different things.
Which area categories DIN 277 distinguishes, and the conversion factors between the two worlds, are covered in the article on reference areas: BGF, NRF and Wohnfläche. It also gives the ranges within which those factors move.
Cost scope: building cost is not total cost
DIN 276 divides the cost of a construction project into eight Kostengruppen, cost groups. Cost groups 300 and 400 together form the Bauwerkskosten, the building cost covering structure and building services. The large majority of published professional benchmarks refer to exactly that slice.
What sits outside it includes the site itself, site preparation and servicing, external works, loose furnishings, the ancillary construction costs, and, since the December 2018 edition, financing, which was given its own cost group. Anyone treating a building cost benchmark as the project budget will understate that budget systematically, and not by a few per cent.
How the cost groups are delimited, what uplift sits between building cost and total cost, and how to handle the tax question cleanly are covered in what a construction cost benchmark includes. It also sets out why value added tax must be shown separately.
Regional adjustment: the national average applies nowhere
Published benchmarks are as a rule national averages. The actual price of the same building differs considerably between a southern German conurbation and a rural region, driven by wage levels, the workload of the contractors available and the intensity of competition at tender.
An average is therefore a starting point, not a result. How the regional spread is structured, and how a national figure is transferred to a specific location, is covered in the article on regional construction cost differences.
Updating: every benchmark has an expiry date
Cost benchmarks are derived from completed and invoiced projects, so they always reflect a past price level. Several years often separate the accounting period behind a dataset from the valuation date of the estimate in hand.
The Federal Statistical Office publishes the Baupreisindex, the construction price index, quarterly, providing the instrument that converts a dated benchmark to the current date. The essential point is not to mix the net and gross series. The calculation is set out in the article on updating costs with the construction price index.
A rule of thumb of roughly three per cent a year, as found in many guides, does not hold. Actual rates of change move quarter by quarter and have run both well above and well below that figure in recent years. Using a flat assumption instead of the published index builds an avoidable error into the estimate.
Ancillary costs: a percentage without a stated base
For the Baunebenkosten of cost group 700, the ancillary construction costs, a figure of 15 to 20 per cent circulates. It appears in practically every source, but on inconsistent bases: sometimes against building cost, sometimes against total cost. For the same project those produce very different amounts.
The items making up cost group 700, and which base each percentage sensibly refers to, are covered in the article on ancillary construction costs under KG 700. It also sets out which items of that group are routinely forgotten.
What this means in practice
A benchmark does not replace a cost estimate for the project in hand. It serves to sense-check a result, to set an early order of magnitude and to compare options against one another. In that role it is valuable, provided its four qualifiers are known and recorded.
Anyone carrying a benchmark into a cost estimate should therefore note the reference area, cost scope, price date, tax basis and source immediately beside the figure. Those five lines are later the difference between a cost estimate that can be defended and one that cannot.
The orders of magnitude given in this article are indicative values for Germany. They do not replace a project-specific cost estimate and vary considerably by region, building type, specification standard and market conditions.