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10 Practical Ways to Reduce House Costs during Construction

Table of Contents for ways to reduce house costs-

  1. Design of house
  2. Hire an expert
  3. Test the soil
  4. Value engineering
  5. Plan at once and avoid changes
  6. Choose the right construction material
  7. Procurement of construction material
  8. Improve labour productivity
  9. Reduce overheads
  10. Reduce wastages

Introduction to Ways to Reduce House Costs

House construction is a costly affair. The cost is due to various factors like material cost, labour cost, statutory approvals cost, overheads, contractor’s profit etc., Considering all the cost aspects, a bifurcation is possible. The cost of house construction divides into fixed costs and variable costs.

The fixed cost comprises all the aspects that are incurred per month to run the project like monthly salaries, taxes, internet bill, accommodation and food for staff etc.,

The variable cost varies as per the usage of a particular item like electricity, material cost, labour wages.

Estimate the preliminary cost for your house with the excel house cost calculator by Civilverse.

In this article, we shall go through ten practical ways to reduce house costs. The steps are logically sequenced, starting with layout selection, designing phase, and material procurement. The construction monitoring and controlling activities at last. Let’s start with the topic.

Design of House

The layout of the house is the first step towards cost reduction. Select the rectangular or a square-shaped layout. The rectangular/square shape has a lesser perimeter for the given area when compared to the H-shaped house. The less perimeter has lesser wall length.

3 BHK House 3D Layout. Image Credit- Aegis

The cost of a house increases with every additional design feature and amenities. The minimalist design is the right choice for cost reduction. It serves the purpose of a house and offer simple aesthetics. The additional façade work, fancy staircase, designer POP work significantly increase the cost of construction.

Hire an expert

I am a civil engineer, and the benefits I see in hiring an expert are innumerable. An expert improves the structural integrity of the house, ensures the best construction practices implementation and whatnot. He/ She improve layout and design for better cost control.

The cost of hiring an expert for the construction is less when compared to the lifetime cost of the house. It is merely 3-10% of the construction cost depending upon the scale of the project and the scope of the expert’s work. Experts suggest small steps that a layman or your cheap-and-best local contractor is unaware of. The small steps in construction yield lifetime cost savings.

An expert suggests multiple ways to reduce house costs.

Test the soil

The soil test serves many purposes like determining safe bearing capacity (SBC), settlement, Atterberg limits (behaviour of soil at different moisture contents) etc. All of the test results indicate the properties of the soil. The test results form the basis of foundation design. The availability and sufficiency of the test data help in design optimisation. Thus, reducing the cost of the foundation.

Ways to reduce house costs-soil test by borehole soil sample collection
Soil sample of a borehole

A soil test is not a compulsion for houses up to two storeys. The visual inspection of the soil and the design of nearby structures gives an idea of the soil safe bearing capacity. A local area expert has experience of the soil strata, and he/she reduce the foundation size to the minimum.

Value engineering

The term value engineering refers to the identification and selection of economical options without compromising the quality of the work. In one of my previous projects, the client always asked his team to do value engineering, and most of the time, his team reduced the work scope to save cost.

To explain value engineering further, let us consider a hypothetical example of a slab. Following are the options for the grade of concrete and sizes of steel.

  • Option 1: M20 grade and 12mm diameter steel bar at 160 mm c/c.
  • Option 2: M20 grade with 10 mm diameter steel bar at 150 mm c/c.
  • Option 3: M25 grade with 12 mm diameter steel bar at 170 mm c/c.
  • Option 4: M25 grade with 10 mm diameter steel bar at 160 mm c/c.

The cost comparison of each option for 1 sqm area and 150 mm thickness of the slab is in the table below. As observed from the table, Option 2 is the most viable.

Value Engineering Example- Ways to reduce house costs

Plan at once and avoid changes

Rework is one of the prime reasons for cost and time wastage. The rework cost is approximately 110-120% (including dismantling) of the actual construction cost. Therefore, thoroughly discuss the design with the expert and the contractor before the work starts.

Plan the construction methodology, check the construction sequence of all the activities. Nowadays, BIM offers a wide range of tools to avoid rework. Clash detection is a tool that identifies the clashes among the structure, HVAC system, fire-fighting system, conduits etc.

Decide the shuttering material (plyboard, MS steel plates) based on the rent for each type. Similarly, decide for the staging and scaffolding material. Provide steel cutting machine and bending machine to facilitate the rebar work. It saves time and labour.

Choose the right building materials

Building material is a major cost in construction. The most viable option to reduce the building material is to choose locally available materials. Regional cement brands like Star, Chettinad, Penna, Coromandel etc., are offered at a competitive price than the national brands like Ultratech, Ambuja, ACC etc. The manufacturer’s test certificate (MTC) assures the quality of the material. If in doubt, test the material in a local lab.

Fly-ash is added to OPC cement to reduce cement consumption. However, fly-ash mixed PPC cement is readily available in the market at a lower price than OPC.

Representative Image for Indian Cement Brands

Fly-ash bricks offer same the strength as red bricks and are lower in cost. Similarly, lime plaster can is an option at some places instead of cement plaster.

Wooden works of jackfruit tree wood are sufficiently durable and cheap.

Also, choose the durable material to reduce the lifetime cost of the house. Selecting the low-quality material for the marginal cost difference is not recommended.

Calculate the construction material for your project with this excel calculator by Civilverse.

Procurement of construction material

Cement and steel are the two costliest materials used in large quantities. Get the quotes directly from the distributors. It helps in getting the best offers and cutting the retailer’s commission. Another advantage is that the material bought in bulk get a discount.

I felt embarrassed in negotiations many people do. I lost a lot of money and time to learn, asking for more. Always remember, if you don’t ask for a better offer, they won’t give you one. Try for a price reduction, discount, additional offer etc.

Improve labour productivity

The labour cost is 25-40% of the house construction cost. Improving labour productivity saves time and money. Observe the movements by workers, downtime, time wastage because of material availability etc. Hire only fit, experienced and trained workers.

Improve labour productivity by briefing the labours about the work and the construction methodology. Store the material at the nearest spot to the worksite to reduce the material shifting time. Ensure the tools and work facilities (lighting, rain cover, PPE etc.) are available.

Rewarding labours for their productive work is a great productivity booster. Also, make the labours own their work. They should be responsible for achieving their daily targets and monthly targets with quality.

Plan your construction labour with this excel calculator by Civilverse.

Reduce overheads

The overheads account for 10-25% of the construction cost. It accounts for all the required activities for the construction work to proceed. It is one of the important ways to reduce house costs.

The overheads include costs for the work permit, insurances, electricity, supervision, office & office furniture, stationery, software license, worker accommodation etc.

Reduce wastages

The acceptable limits for material wastage are-

  • Cement 2%
  • Sand 3.5%
  • Sand & Aggregate 3.5%
  • Bricks 4%
  • Steel Reinforcement 2.5% (2% returnable and 0.5% invisible)

The building material wastage beyond the limit is unacceptable and needs control. The first step towards controlling wastage is to keep a wholesome record of the materials. Keep moisture sensitive material like cement under the cover. The steel pieces of length smaller than 1m should be considered waste and stored at a place.

Establish a rolling margin for steel to account for the variation in theoretical and actual weight.

Conclusion on Ways to Reduce House Costs

There are many ways to reduce house costs. Pre-construction, construction and post-construction cost all combine to make to the lifetime cost for a house. During construction, avoid petty ways to reduce house costs, like substantially reducing the quality.

A very efficient way to reduce house costs is by using construction machinery. The machinery rent is high, so plan for the multiple works at once before mobilizing the machinery at the site. Also, avoid multitasking for machines and labours.

Learn about the house cost estimation in 10 easy steps.

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