What drives the cost of building a house in the Coffee Region

The question we are asked most is how much it costs to build a house per square metre. We are not going to give that figure on this page, and we want to explain why.

A price per square metre averages out houses that are nothing alike: one on a flat plot with utilities at the gate, and another on a hillside, far from the paved road, with retaining walls and a septic system. In the Eje Cafetero (Coffee Region) that difference can weigh more than the finishes. A general figure would either raise your hopes or lead you to rule out a project, and in both cases it would be misleading you. What we can do is explain what the cost depends on and how to compare two budgets.

We are YU Construcciones S.A.S., a construction company based in Armenia, Quindío. This is general guidance: the cost of your project can only come from seeing the plot, reviewing the drawings and measuring quantities.

What drives the cost most in the Coffee Region

• The ground. The slope, the type of soil and the water determine how much earthmoving, how much retaining and what foundations the house needs. On a hillside, retaining walls and drainage can be a large section of the budget; see slopes and retaining walls.
• Access. If a tipper truck cannot reach the plot, materials are transferred to smaller vehicles or carried up by hand, and that is paid for on every trip.
• Distance to utilities. If water, power and sewers are not close by, the networks have to be brought in or solved on the property: water intake, septic system, electricity connection.
• The structural system and the number of storeys. Confined masonry, concrete frames, steel structure or combinations. More storeys, long spans and cantilevers mean more structure, and in a high seismic hazard zone the NSR-10 (Colombia's earthquake-resistant building code) is demanding.
• Area and shape. Area counts, but so does shape: a house with many changes of direction, levels and cantilevers costs more per metre than one with a simple plan and the same area.
• The level of finishes. Flooring, tiling, joinery, sanitary fittings, kitchen and windows. It is the most visible variable and the one that can be adjusted most.
• Outdoor works. Swimming pool, terraces, pergolas, parking, boundary walls and green areas are usually budgeted separately from the house, and it is worth considering them from the start.
• Logistics on a rural site. Staff travel, storage of materials and security.
• The rainy seasons. The region has two a year. Excavating or pouring concrete in the middle of the rains delays the works and calls for protection and pumping. A schedule that ignores the weather ends up being paid for.

Costs that are often forgotten

• Studies and designs: topographic survey, soil study, architectural design, structural design and, depending on the case, network designs.
• Building permit: the fees of the curaduría urbana (the private licensing office that issues building permits) and the municipal building tax (impuesto de delineación urbana), depending on the municipality. See the building permit, step by step.
• Utility connections: connection charges, meters and service connections.
• Taxes and charges on the plot: property tax and, if you are buying it, notary and registration fees.
• Interventoría (independent contract oversight) or external supervision, if you decide to hire it.
• Contingencies. Every project has them, especially below ground. A budget with no margin for them is not cheaper: it simply leaves them out.
• What is not construction: furniture, appliances, curtains and the move.

How a unit-price (APU) budget is put together

A serious budget starts from the quantities of work, not from a price per square metre:

1. Visit and drawings. The plot is inspected and the drawings and specifications are studied.
2. Quantities. Each activity is measured: cubic metres of excavation and of concrete, kilos of steel, square metres of wall, render and flooring, electrical and plumbing points.
3. APU (unit price analysis). For each activity the cost of one unit is calculated: materials with their wastage, labour with its output rate, equipment and tools, and transport.
4. Budget. Quantity times unit price, activity by activity, grouped into sections: preliminaries, foundations, structure, masonry, roof, networks, finishes and outdoor works.
5. Indirect costs. Administration, contingencies and profit — what in Colombia is usually called AIU (administración, imprevistos y utilidad) — and taxes according to the type of contract. Sometimes they are included in each unit price; what matters is knowing where they are.
6. Schedule and payment flow. When each section is carried out and how much money is needed at each stage.

How to read a budget

• First check the scope: what it includes and, above all, what it does not.
• Look at the specifications: concrete strength, type of block or brick, references for the finishes.
• Look for the quantities. A lump-sum price without quantities cannot be verified or controlled on site, and large lump-sum items tend to hide assumptions nobody wrote down.
• Ask for the APU for the items that weigh most. That is where you can see whether the price makes sense.

How to compare two budgets

Comparing the totals of two quotes is almost never comparing like with like. Before looking at the total, check:

• The same scope. That both include the same activities: retaining structures, outdoor works, the septic system, the connections.
• The same specifications. Concrete of a different strength or a finish from a different range changes the price and changes the house.
• Similar quantities. If one has much less steel or concrete than the other for the same house, ask why.
• What is included: designs, permit, studies, transport, final clean, insurance bonds and taxes.
• The payment terms: how much is paid in advance and against what the remaining payments are made.
• The contract and the schedule: whether there is a written contract, a timescale, a schedule by stages and warranties.
• Who directs the works and how you will be kept informed of progress.

To compare properly it helps to have drawings and specifications before asking for quotes; if you do not have them yet, see consulting and estimating.

Warning signs

• A very large advance payment with no guarantees. If there is an advance, it should be proportionate, written into the contract and backed, for example, by an advance-payment bond (póliza de buen manejo del anticipo).
• A price per square metre given over the phone, without having seen the plot or the drawings.
• No written contract, or a contract that does not state the scope, price, timescale and payment terms.
• No schedule, or payments tied to calendar dates rather than to progress.
• A price far below the others with no explanation: almost always something is missing from the scope or the quantities, and it turns up later as an extra.
• Payments in cash or into personal accounts, with no invoice.

How we budget

1. Visit to the plot. Within Quindío it is free of charge; outside the department, the terms are agreed beforehand.
2. Quantities and APU for each activity, based on the drawings and the specifications.
3. Written budget with quantities, specifications and a schedule.
4. Written contract, with insurance bonds where required.
5. Construction with a resident engineer, regular reports with photographs and payments against records of verified progress.

If the plot is in the countryside, also see what to check before buying it in country houses. If you live outside Colombia, read how we work with owners who build from abroad.

Frequently asked questions

Why don't you publish a price per square metre?
Because in this region the ground, the access and the utilities change the cost of a house as much as the finishes do, and a general figure does not reflect that. We would rather give you a budget that can be checked item by item.

Can you give me an approximate figure before the visit?
With the location, a few photographs and your idea of the house, we can tell you which aspects of the plot will weigh most. A figure you can base decisions on needs a visit, drawings and quantities.

Is it better to contract at a lump-sum price or on unit prices?
With unit prices you pay for what is actually carried out, measured on site. With a lump sum the price is fixed from the outset, which requires very complete drawings and specifications. In both cases the contract should state how changes are handled.

What happens if something unforeseen comes up during the works?
The sound approach is for it to be documented, priced with the same method and approved by you in writing before it is carried out. Ask for the contract to say so.

Do you have a plot or a set of drawings? Send us the location and what you want to build, and we will tell you what is needed to budget it properly.

Message us on WhatsApp Build your request online