There are a number of sites on the internet that purport to be able to provide the user with an estimate of the cost to construct their home. People often believe this is an inexpensive alternative to engaging a quantity surveyor to provide a building cost estimate. The question then is:
Can you rely on the result the calculator provides, particularly if you need the estimate as a basis for insuring your property?
The answer is no. If you look hard enough on most of these sites they will tell you that the estimates they provide are only a guide and ‘may not’ be relied upon for such purposes as insurance. There are good reasons why these calculators cannot be relied upon.
- On-line calculators rely upon the user being competent to accurately measure the areas of the building. Some users may be able to fulfil these requirements, however most people are not trained to do this. As the various areas of the building require different rates (some three times as much as others) the area measurement process is critical to an accurate outcome.
- Some calculators don’t even require an accurate measurement of building areas – they simply ask for the number of rooms, then best guess the room sizes as a basis of the calculation. This can lead to extreme inaccuracies in the final estimate.
- All calculators rely on the user being able to accurately assess terms that relate to the quality of construction (such as high standard, medium standard, low standard, etc.) Most people would not be able to competently answer these questions because they do not regularly compare buildings for this purpose. Once again inaccurate information leads to inaccurate estimates of cost.
- The on-line calculators all do the same thing – they multiply building areas by building rates (i.e. square metre rates or costs per square metre). They do this without having so much as viewed a photograph of the building. Needless to say they frequently pick the incorrect rate to use in the calculations – once again resulting in grossly inaccurate estimates.
It is obvious that the best way to arrive at an accurate replacement cost estimate for your property is to engage a firm of qualified quantity surveyors to arrange a visit your property, assess the quality and quantity of the improvements and accurately estimate the costs to re-build. This of course includes allowances for demolition and removal of debris, professional fees and allowances for inflation from the time of the destructive event to the time of final completion.
DAVID LEARY FAIQS AFAIM
Managing Director
David is a quantity surveyor with more than thirty-five years professional experience. He is a fellow of the Australian Institute of Quantity Surveyors and an Associate Fellow of the Australian Institute of Management.