Building Cost Information Service

Calculation

The BER Building Cost Index is compiled from information collected quarterly by means of a standard questionnaire from the same group of quantity surveyors. These quantity surveyors supply information on the scope of the project, some amounts and the tariffs (rates) of a number of items from the bills of quantities of accepted tenders.

The index is compiled by analysing current price movements of 27 items. These items are classified into the various workgroups (WGs) as provided by the ASAQS in their determination of CPAP 180 and 181. An index is then generated per WG and the CPAP weights are applied. This yields a building cost index for residential buildings (using CPAP 180 weights) and non-residential (using CPAP 181 weights). The overall BER BCI is then derived by applying the relative nominal spending on residential and non-residential buildings (as provided by Statistics South Africa) in 2021. Click here for more detail on the methodology.

While this is a departure from the previous methodology it is still a weighted Laspeyres (or base-weighted) index and both methods would yield the same the results. Additionally, the rates per item will still be published.

Value

During the early 1980s, Statistics South Africa started to publish an index that was also based on an analysis of accepted tenders. However, this index (called the “Builders’ Contract Price Index”) was terminated in the late 1990s due to public sector budget cuts. Therefore, the BER Building Cost Index is one-of-a-kind in South Africa. Stats SA continues to publish data for the Contract Price Adjustment Provisions Work Group Indices (CPAP).

The BER Building Cost Index is a unique index, as it is based on an analysis of accepted tender prices (i.e. the ex-ante output prices of building contractors). This implies that the index reflects market conditions, because it includes the profit margins of building contractors in addition to builders’ input costs (labour, materials, plant and fuel) and allowances for contingencies. By contrast, the CPAP indices (published by Stats SA) reflect only builders’ input costs and exclude the profit margins of building contractors.

Research shows that this index of tender prices is sensitive to movements in business cycles. This happens because the degree of competition in tendering intensifies during economic recessions – building contractors are obliged to trim their profit margins in times of slack building demand, and vice versa in growth phases (highlighted yellow in the chart below) in the economy.

Use

The BER Building Cost Index is widely accepted by the quantity surveying profession as an indicator of trends in tender prices. However, not only members of the quantity surveying profession find the building cost data useful, but also building contractors, lawyers and arbitrators, property valuers, insurance brokers and insurance companies and, of late, asset management companies.

For more information on the use of the index, click here.

It is not possible to use the BER Building Cost Index to obtain information on the building cost in rand per square meter for a specific building or type of building. For such information it is best to consult a registered quantity surveyor. However, if a rough estimate would suffice, consult the sources below:

• BER Trends
• https://www.asaqs.co.za/page/free_publications

Frequently Asked Questions (FAQ)

Why can’t I seem to access the reports online? /Why have I not received reports?

The reports are available to subscribers under the MY ACCOUNT >>> MY DOCUMENTS after logging in. A new subscriber will only get access to the next report that becomes available (renewing subscribers will receive no break in service as all the reports they previously subscribed to can be accessed via the MY ACCOUNT >>> MY DOCUMENTS menu).

Only one registered user is allowed per company (the person who is responsible for ensuring the internal availability of the report/research) and it could be that the user has not distributed the report. In that case, please confirm who the registered user is currently.

Why am I unable to subscribe online?

For existing subscribers, it’s likely that you still have a valid subscription and a new registration will only be allowed once that subscription ends or the enquirer is using Google Chrome. In the latter case, please subscribe using a different web browser.

I’d like to receive the reports by email, how can I arrange that?

The report can be accessed in two ways, 1) by clicking on the download link in the email - sent to the registered email address - notification once the report is released or 2) By logging into the BER website. The email link option does not require a username or password.

When does my subscription end?

This can be viewed under the “my accounts” section on the web once logged on.

We subscribed to this service and have received our invoice. After subscribing through your website we have discovered that the ASAQS offers a 20% discount if done through the ASAQS website. We are now unable to get the discounted amount through the ASAQS as we had already subscribed. Please would you consider giving us the 20% discount as ASAQS members?

Unfortunately the discount can only be “activated” if the request for subscription comes via the ASAQS membership portal. In this instance the current application has to be cancelled and you will need to re-subscribe via the ASAQS membership portal.

We previously received a discount on the standard subscription fee. How do we apply for this discount when we renew our subscription?

Unfortunately we have an arrangement with the ASAQS which ethically prohibits us from offering any discounts to QS firms unless said firm is a member of the ASAQS. In that case, they receive 20% off the price of an annual subscription if they register via the ASAQS website.

More FAQ's.