Why there is no standard breakdown
The reason lies in the asymmetry set out in the article on the weight of land. The land share overwhelms the other items.
The land item varies by multiples according to location.
The other two items vary far less.
Mechanically, the land share of the total therefore varies enormously, and any national average erases precisely the information sought.
The same project may see land represent a modest share or half the total budget, depending on the municipality alone.
| Element | Behaviour | Use in estimating |
|---|---|---|
| Land | Varies by municipality | Priced first |
| Works | Predictable per m² for a given brief | Priced item by item |
| Ancillary costs | Proportional to the two above | Priced as a percentage |
What is stable
Three elements behave predictably, and they suffice to build an estimate. They concern land, works and ancillary costs.
The internal breakdown of the construction item. Luxembourg professional sources place the shell in the lower half of the works budget, the second fix in a comparable share, and finishes in a smaller but highly variable share depending on specification.
The weight of ancillary costs relative to construction cost, placed by the same sources in the order of fifteen to twenty per cent.
The construction price per square metre, whose range is narrow at a given finish level, covered in the article on works cost per m².
Those three stabilities allow items two and three to be estimated with reasonable accuracy, once the brief is known.
How to build a project-specific breakdown
Four steps, in this order.
Estimate the construction cost from the area envisaged and a range per square metre matching the finish level targeted.
Add the ancillary costs by applying the usual order of magnitude to the construction cost.
Add the full cost of the land, acquisition, servicing and purchase costs included.
Only then calculate the proportions, which will be specific to that project and location.
This sequence gives a usable breakdown, where a standard breakdown would give a false one.
What use to make of proportions
Three legitimate uses, and one to avoid.
Checking the overall consistency of an estimate. An ancillary cost share well below the usual order of magnitude generally signals an omission.
Identifying the item where a decision will have real effect, which avoids lengthy negotiation over a line that weighs little.
Tracking drift during the project, by comparing planned with actual breakdown.
The use to avoid is comparison between projects. Two projects with different breakdowns are not comparable if their locations differ, which is almost always the case.
The area trap
A technical point that distorts most comparisons. The scope adopted differs from one source to another.
Not all prices per square metre refer to the same area. Living area, built area and gross area give very different results for the same building.
A price per square metre without a definition of the area is unusable.
Practical rule: always ask which area a figure refers to before using it, including in a quotation.
What this means for a professional
Four rules.
Do not publish or use a standard breakdown, it varying too much by location.
Build the breakdown from the items, not the reverse.
State the reference area of any figure per square metre used.
Use proportions to check an estimate, never to produce one.
This article reflects the state of the data at the date of checking and serves professional orientation. It does not replace an estimate or consultation of quotations.