The construction price index measures how the construction and planning costs and the maintenance of buildings change over a certain period of time. For a realistic cost estimate, the price development of 177 possible construction works and not that of the buildings themselves is taken into account.
What does the construction price index indicate?
When calculating the construction price index, it is important that the price development of the buildings themselves is not calculated, but rather that of the construction work. A total of 177 individual construction works are included in the determination of the construction price index. The index is published quarterly by the Federal Statistical Office and is important for better assessing the price development of a building. For example, the construction price index also reflects economic fluctuations.
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Builders should keep an eye on the construction price index when planning a construction project, estimating the value of a building or taking out homeowners insurance. If those who want to build want to take out such insurance, they may stumble across the “insured sum 1914” from time to time. The construction price index is also required to calculate this. The sum insured for 1914 indicates how much the house to be insured would have cost in gold marks in 1914. The year was chosen because construction prices were stable that year. If the value has been determined correctly, the sum insured will be adjusted annually as the costs increase.
The calculationIn order to calculate the construction price index, a representative sample of the contractually agreed prices of 200 construction works is collected. Among other things, it is about the prices for plumbing and heating , steel construction, carpentry work, timber construction , roofing and concrete work. The average price development is calculated below for the respective area and then compared with the prices of previous years. One compares the individual construction work and not entire new buildings with each other, since such an approach would be much more difficult due to the individual building specifications.
How is the construction price index indicated?
The construction price index itself is always given in relation to a base value and in points. The base value was last set for 2010 and is 100 points. By May 2017, the average price of construction work has increased by 16.4% and therefore the construction price index is now at 116.4 points. 14 years ago, in May 2007, prices for construction work were 4.8% lower than in the base year 2010. The construction price index was therefore 95.3 points in May 2007.
What else falls under the term construction price index…
Incidentally, the term construction price index is somewhat misleading. In fact, there is not just one index, but many different indices. The construction price index for conventional new building construction includes the indices for residential buildings, office buildings and commercial buildings. And these three indices can also be divided into several subcategories. There are also indices for the new construction of prefabricated single-family buildings, for civil engineering and for the maintenance of residential buildings. As a rule, however, it is about the index for residential buildings, for example when talking about the construction price index with a view to private construction financing or in relation to insurance.
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